America in the 1980’s: An Overview

America in the 1980’sThe challenges of America that followed the

Watergate scandal, the energy crisis and Vietnam would have dimmed the national optimism that followed World War II

Former California Governor Ronald Reagan proposed to restore national optimism though conservative government and aggressive foreign policy

The 1980’s would usher in a new age of growth and the end of the Cold War

As is always the case, we can also see the seeds of future challenges in American society being sown in the 1980’sGlobal terrorismGrowing economic inequality

The Conservative RevolutionGovernor Reagan would challenge President Carter in

the election of 1980 as it was mired in great foreign and domestic challengesAmerican were taken hostage in Tehran, Iran in November

1979 Protesting America’s support of the brutal dictatorial rule of the

Shah who had fled to America following a revolutionAmerican economy suffering another energy crisis and

high inflationAmericans were growing frustrated by feeling of

weakness and lack of strong leadershipPresident Reagan promised to restore America

leadership America’s leadership in the worldRan along with Republican rival George HW Bush for VP

President Reagan won a resounding victory in 1980

Reagan received strong report from the New Right including conservative Christians in the newly organized Moral MajorityFelt that Christian values and

liberalism had pushed America of its moral center

Felt welfare and civil rights policies compromised

Pushed for the reversal of the Roosevelt-Johnson welfare state

Reagan’s big win in 1980 gave his conservative program a mandate

A Conservative Administration

President Reagan promised a departure from liberal social programs and regulation to restart the American economyFree market economy and deregulation

Allow the forces of capitalism dominate economic activityLower taxes

Decrease social welfare programs to manage spendingConservative social values

Support of school prayerGun rightsAnti-abortion

These ideas made him popular among the New Right and Moral Majority

This support would dominate presidential politics for 12 years to 1992

Reagan was known as the Great Communicator-effective at communicating conservative message

Reaganomics: Engineering a Recovery

President Reagan viewed high taxes and regulation as the cause of America’s anemic economy

Solution- Reaganomics (aka “trickle down economics)Cut income tax on wealth to

encourage investment and job creationCut regulation that made economic

development more difficultOpen public lands for economic

developmentBenefits would “trickle down” to the

middle class and poor

The success and failure of ReaganomicsSuccess

Knocked down inflation and unemployment- stagflation was gone by 1983

Stock market soared through much of the 1980’s

On average, Americans were earning 10% more in inflation adjusted dollars by the end of the Reagan years

ProblemsTax cuts and growing

defense spending increased budget deficits and accumulated national debt

Deregulation of banks and stock market generated significant meltdowns by 1987

Environmental deregulation hurt the environment

The distribution of income between rich and poor widened

Reagan and the World:President Reagan promised a hard line against the Soviet

UnionReferred to the Soviet Union as The Evil EmpireBelieved that aggressive posturing was the way to engage the

Soviet Union- not morality or realpolitikAmerican hostages in Iran freed the day Reagan was

inaguratedReagan engineered the largest peace time expansion of the

military in American historyBudget nearly doubledPush to develop Strategic Defense Initiative

Make Soviet missiles powerless through laser interception Critics called it Star Wars- impractical

Reagan’s critics claimed he neglected the poorest Americans to build weapons

Attracting CriticismThe combination of

higher defense spending and cuts to social programs angered many

Reaganomics made some investors rich but left many people without support

Were the costs of Reaganomics and the defense build up worth it?

Pressing the Evil Empire and Global Communism1980 might be considered the high point in

the power and influence of global communismCommunist governments dominated Eastern

Europe, China, southeast Asia as well as the USSR and were growing in Africa and Latin America

Tensions with the Soviet Union deepened- (détente broke with the Soviet invasion of Afghanistan in 1979)

Cold War Challenges: First TermPoland 1981

Americans warned Moscow not to invade Poland when a growing labor movement Solidarity challenged martial law declared by Poland’s government

Near Korea 1983Korean passenger airliner shot down by Soviet fighter- claims

it was a spy planeEurope 1983- Americans place nuclear weapons in Britain

and GermanySoviets and Warsaw Pact boycott 1984 Los Angeles Olympics-

joined by many Communist countriesPresident Reagan supported anti communist groups in

Latin America while knocking out a communist government in Grenada in 1983Opponents wanted to limit America’s support of anti-

communist forces in Nicaragua (Contras)- another Vietnam?

Morning in America: The Reagan Reelection of 1984

President Reagan easily won reelection in 1984 against Democrats Walter Mondale and Geraldine Ferraro

Reagan Campaign Ad- Why was this message effective?

Reagan won by a larger margin than 1980

Reagan became the oldest American inaugurated as President

Economic Challenges: The Public SectorHigher defense spending and tax cuts induced

soaring budget deficits that Reagan vowed to stopGramm-Hollings Act required across the board

cuts in government spending to address deficitsFederal Deficit- gap between budgeted government

income and spendingFederal Debt- accumulated money owed to banks and

individuals loaning money to the federal governmentBudget deficits and debts have been a federal

problem since the New Deal and World War II

A Look at Budget Deficits

Economic Challenges: The Private SectorDeregulation of the economy was supposed to stimulate

economic growthLess regulations invited corruption

Insider trading scandal in the stock market The use of confidential information to gain advantage in the

purchase and sale of stocks This was a cause of the collapse of the market in 1929 Discourages most people from investing- like poker with a

stacked deck Decline in trust led to a market crash in 1987 bigger than 1929

A crisis in the Savings and Loan banks generated by a collapse in real estate markets forced government to cover billions in losses

Neither crisis generated a depression… lingering power of New Deal?

A Foreign Policy Crisis: The Iran-Contra AffairAt any time in a presidency, the president

will have a number of foreign policy crisesAmerica’s anti-communist foreign policy

supported the efforts of Nicaragua’s ContrasPro-Iranian groups in Lebanon held American

hostagesThe president must work within the

Constitution and CongressThe Reagan Administration tried to solve

these problems outside of its legal rights

What happened?Administration sold weapons to Iran

Iran desperate needed weapons for war against IraqAmerica had no formal relations with Iran following

hostage crisisAmerica hoped Iran would press pro-Iranian hostage

takers to release hostages in LebanonProfits from sale diverted to anti-Communist contras

Congress had forbidden direct support of ContrasReagan not directly involved by subordinates

shredded documents Members of the White House staff implicated

Reagan criticized for his lack of control over subordinates

The Warming of the Cold WarA new type of leader took control

of the Soviet Union in 1985- Mikhail GorbachevEconomic reformer- perestroika

Push to create a consumer economy- cut down government and military spending

Political reformer- glasnost “openness”Freedom of expression

Gorbachev needed to negotiate to decrease military spending

Gorbachev grew popular in the United StatesHope to lower cold war tensions

Negotiating a Thaw in the Cold WarPresident Reagan and Chairman Gorbachev negotiated

many important arms control agreementsNegotiated the end of intermediate range nuclear missiles in

Europe and the end of the Soviet occupation in AfghanistanGorbachev renounced the use of force in foreign policy- later

announced a policy of non-intervention in Eastern EuropeAnti-communist groups in Poland, Czechoslovakia and

Hungary worked to unseat communist governmentsRebellion in East Germany led to resignation of its

Communist leaderEast German solders quit patrolling the Berlin Wall9 November 1989- Citizens of Berlin take the wall down-

symbolic end of the Cold War in Europe

The Republican Revolution Continues

Vice President Bush continued Reagan’s policies defeating liberal Massachusetts governor Michael Dukakis

In his first year, communism collapsed- end of the Cold War

The Soviet Union breaks up on 25 December 1991- What a Christmas present for Cold Warriors!

A New Crisis in the Gulf August 1990, Iraqi forces under

Saddam Hussein invade oil rich KuwaitClaim that it was historically part of Iraq Iraq owed Kuwait money for its war

against Iran Nations in region concerned about

Iraq’s power grab- America concerned about balance of power and oil wealth

UN condemned invasion America and a coalition of countries

mobilized troops in Saudi Arabia (1/2 million Americans)Largest troop deployment since VietnamWide global supportWaiting for 15 January 1991 UN deadline

for Iraq withdraw

Overcoming the “Vietnam Syndrome”

President Bush believed it was important to clearly communicate that he was not LBJ and this was not VietnamIdentified clear objectives- remove Iraqi forces

from KuwaitIdentified limits of the mission- “no mission

creep”Provide full support for soldiers and sailrs

deployedHave allies

This war would last 100 hours and would meet its objectives

A New Kind of WarStep 1- Operation Desert Shield

Deploy troops to Saudi Arabia to check further Iraqi expansionThis would anger many in Saudi Arabia including Osama bin

Laden- Crusaders in the Holy Land of the ProphetStep 2- Air attack Operation Desert Storm

Bombing of Iraqi targets began 16 JanuaryHi-tech “smart bombs” do serious damage to Baghdad

Step 3- Operation Desert Storm Attack on Kuwait began 23 February

Iraqis driven out days later- 100,000 killedUnited Nations forces accept a negotiated armistice with

Saddam- Quick decisive victory ends Vietnam Syndrome

Economic ChallengesPresident Bush inherited some of the problems of

Reagan’s second termLarge budget deficits created by defense spending and tax

cutsSavings and Loan mess- cost of bail outA trade deficit was a growing problem

Cities like Pittsburgh were ravaged by the decline of the steel industryAuto industry continued to struggle with the challenge of foreign

competitionAmerican economy fell into recession

In spite of his challenge “read my lips, no new taxes” he raised taxes to bridge budget deficit

His popularity quickly fell as he approached election of 1992

American Political and Economic History… In a NutshellMore conservative government ended stagflation

of the 1970’s, but the plight of the poor became more difficult and distribution of income widened (rich got richer and poor got poorer)

A more aggressive foreign policy directed the end of the Cold War and pushed Iraq out of Kuwait in the Gulf War, but high military spending plagued the budget and new enemies in the Middle East would be looking for an opportunity to hit America

We will look at American social history and popular culture next…