HUSH 2: The 80's & 90's Test - President Reagan

Ronald Reagan Inaugural Address

• focused on reversing the nation's severe economic decline and curbing the power of the federal government.

• government is not the solution to our problem; government is the problem," promised tax cuts, reduced regulation, and economic recovery

• Iran Hostages were released immediately after Reagan’s inauguration

• full of hope and prosperity

Ronald Reagan Background

• born february 6, 1911 - Tampico Illinois

• grew up in a modest middle class family

• nicknamed “dutch”

• attended Eureka College on an athletic scholarship, where he studied economics and sociology

• began in radio broadcasting as a sports announcer, transitioned into hollywood

• became a successful actor during the 1930’s through the 1950’s - developed the communication skills and public presence that would enhance his political career

Ronald Reagan: early involvement in politics

• during his time as the president of the Screen Actors Guild he became involved in anti-communist efforts during the early years of the cold war

• was initially a Democrat but eventually embraced conservatism

• nationally televised speech in support of Republican candidate Barry Goldwater gained him attention

• elected as governor of California - served from 1967-1975

• unsuccessful bids for presidency in 1968 and 1976

“The New Right”

• this group brought together economic conservatives, anti communists, and social conservatives who shared a common opposition to liberalism.

• goals included reducing the size of government, strengthening national defense, and restoring what they saw as traditional American values.

Rise of the Religious Rights

• the rise of the religious right as a powerful political force - Evangelical Christians began to organize and mobilize in response to cultural and social changes.

• Jerry Falwell encourages Christians to become more involved in politics to promote their values.

• the religious right focused on issues including opposition to abortion, support for school prayer, and resistance to the feminist movement and gay rights - advocated for the teaching of creationism in public schools and sought greater censorship of media they considered immoral.

Economic troubles in the late 70’s

• 1970’s were marked with economic struggles - the burden would be placed on Reagan in the 80’s

• Reagan capitalized on this dissatisfaction by offering a clear and optimistic alternative.

• promised to restore American strength, reduce taxes, cut government spending, and rebuild national pride.

• “Reagan democrats” - these voters were drawn to Reagan’s emphasis on economic growth, strong national defense, and traditional values

The 1980 Election

• Ronald Reagan won in a landslide victory, capturing a majority of the popular vote, and carrying a significant number of states.

• Republicans gained control of the senate and made substantial gains in the House of Representatives - major shift in political power

• Often called the realigning election because it reshaped the political landscape for decades to come, ending a long period of Democratic dominance in Congress

What is the basic idea behind Reaganomics and why was it so controversial?

• cutting taxes would increase revenues - budget cuts

• very controversial - even for his supporters

What happened on May 30m, 1981 and what was the impact of this event of Reagan’s presidency?

• shots were fired outside a hotel Reagan had spoken at

• Reagan was injured - shot in the chest

• it elevated Ronald Reagan’s popularity

• Everyone was grateful that his life had been spared

• after the incident congress decided to pass the bill for Reaganomics

Reaganomics

Economic Recovery Tax Act of 1981: 25% cut in income taxes over 3 years; cuts in corporate, capital gains, inheritance taxes, most of the tax relief went to upper-income Americans

• lowest marginal tax rate since 1931 (28%)

$40 billion in spending cuts: food stamps, aid to families with dependant children, student loans, health, housing, mass transit, job training, school lunch, environmental protection, the National Endowment for the Arts, etc

• massive increase in military spending: $134 billion to $253 billion in five years

• Critics called it trickle down economics, his 1980 rival. (and later vice president) George H.W Bush called it voodoo economics

Deregulation

• banks, wall street, and industry especially benefitted from deregulation

• Deregulation of banking, transportation, media, environmental regulations, health care, workplace consumer protection, etc

• The EPA’s budget was only cut by 22% as were the budgets of other government agencies

• cutbacks on air pollution and fuel efficiency rules, many federally protected forests and wilderness areas opened to developers, expansion of off shore oil drilling

• The Professional Air Traffic Controllers Organization strike (1981): 13,000 federal air traffic controllers went on strike

• Reagan declared the strike illegal because federal employees were prohibited from striking and gave workers 48 hours to return

• Reagan fired over 11,000 controllers and permanently banned them from federal service

• major turning point in u.s labor relations, weakening unions and signaling a tougher federal stance against organized labor, encouraging employers to take a harder line in labor disputes, union membership in the u.s declined dramatically.

What important message did Reagan’s firing of air traffic controllers send?

• he was not scared to do what was controversial

The Reagan Recession of 1981-1982

• the worst recession since The Great Depression of the 1930s

• a rise in bankruptcies and homelessness, 11% unemployment, inflation at 12%, but it eventually comes down to 4%

• larges budget deficits in American history due in large part to tax cuts and huge increases in defense spending

• Reagan responds by further cuts in domestic programs

• Trade deficits(the gap between what we export to the world and what we import) increase dramatically: $31 billion in 1981 to $111 billion in 1984 to $170 billion in 1986

• midterm elections - republicans suffer heavy losses

Describe scenes of the recession:

• factories closed, businesses closed, the poor were very unhappy - said it was only a country for the rich

What did budget director David Stockman tell President Reagan?

• he told him nothing

What happened to Reagan’s approval rating and to the Republican party in the 1982 midterm elections?

• His approval rating went down significantly

Reagan’s great turnaround

• the u.s economy rebounded starting in 1983, just in time for the 1984 election

• unemployment dropped to 5.3%, 16 million new jobs

• economic growth of 4.5% a year

• a five year bull market on wall street: 1982-1987

• the American economy transitions from manufacturing to finance, corporate takeovers and leveraged buyouts take place at a rapid pace

• increasing gap between rich and poor, middle class stagnation/decline

• an increase in the poverty rate at the same time that there were more people making more that $75,000

Income inequality since 1980

For decades leading up to 1980, all incomes from top to bottom rose at nearly the

same pace. But that changed dramatically afterward.

 In 1980, the top 4% of taxpayers earned as much as the bottom 39%. By 2019, the

top 4% earned as much as the bottom 57%, according to a Public Integrity analysis of the

most recent IRS data.

 As more money flowed upward, the gap in accumulated wealth widened.

In 2019, the top 10% of Americans had three times the wealth of everyone else in

the country combined.

What was Reagan’s reelection slogan?

• its morning again in america

How did President Reagan perform in the 1st debate vs Walter Mondale

• not well, he looked confused, people started questioning his age

Why was the 2nd debate so significant?

• it showed how much the public loved Reagan

1984 midterm elections:

• The Democratic Party’s nominee, Walter Mondale made history by choosing the

first woman to run for Vice President: Geraldine Ferraro.

• Reagan wins big

How did life in America’s inner cities change the 80’s?

• homelessness became prominent in urban areas

• cocaine in a rock - violent crime - drug dealing

Describe yuppies

• affluent, college-educated adults who emerged in the early 1980s, characterized by high-earning careers in cities, intense ambition, and conspicuous consumption

Why was the space shuttle so important?

• it was crucial as the world’s first reusable spacecraft, designed to make space access routine and cost-effective.

What was the significance of Jobs and Wozniak in the context of the 80’s?

• Steve Jobs and Steve Wozniak were foundational figures in the 1980s, shifting computing from a niche hobbyist activity into a mainstream consumer industry. Together, they launched Apple Computer (1976) with their 1980s significance primarily driven by the massive success of the Apple II, the 1980 IPO, the 1984 Macintosh launch, and the development of user-friendly, consumer-oriented technology

What happened on the 25th space shuttle mission?

• the shuttle exploded

How did people respond to the advent of MTV

• at first people were devastated

Who were Jimmy Swaggart and Jim Bakker?

• religious tv network hosts

Why did people respond so slowly to the AIDS crisis?

• people got aids doing things others did not approve of

• 100,000 Americans died from AIDS in 1980

The Crash of 1987

The long bull market of the early–mid 1980s came to a sudden end in October 1987.

 On October 19, 1987 (“Black Monday”), the Dow Jones Industrial Average plunged 22.6% in a single day, still the largest one-day percentage drop in U.S. stock market history.

 Roughly $500 billion in market value vanished in one day, with global markets also falling sharply.

 Unlike 1929, the crash did not lead to a prolonged economic depression; the broader U.S. economy remained relatively stable.

 The Federal Reserve, led by Alan Greenspan (newly appointed), quickly intervened by injecting liquidity and reassuring markets, helping restore confidence.

Reagan and The Supreme Court

Reagan moved the court in a more conservative direction with his nominations.

 Appointed the first woman to The Supreme Court:

Sandra Day O’Connor.

 Elevated William Rehnquist to Chief Justice.

 Reagan also appointed Antonin Scalia and Anthony Kennedy.

A closer look at the economy:

The U.S. shifted from the world’s largest creditor to the world’s largest debtor nation, as borrowing increased to finance government.

 Under Reagan, annual federal deficits surged to roughly $200–300+ billion, driven by a combination of major tax cuts and significant increases in defense spending.

 The national debt nearly tripled, rising from about $900 billion in 1980 to around $2.7–3 trillion by 1989, marking a major expansion of federal borrowing.

 The trade deficit widened dramatically, reaching $150+ billion annually by the mid-to-late 1980s.

 Despite cutting many domestic programs, Reagan also approved some tax increases, including on Social Security payroll taxes.

 Federal spending priorities shifted: reductions in certain social programs (such as food assistance, housing support, and student aid) contrasted with growth in military spending, reshaping the role of government in the economy.

New social trends and challenges of the 80s

The largest migration of people to the U.S. in the 20th Century, mostly from Latin America and Asia continues (Korea, India, Southeast Asia).

 Crisis in American inner cities: poor housing, increasing violence, inferior schools; shrinking tax revenues and services.

 Growing homelessness, cuts in federal housing, reduced welfare, fewer unskilled jobs, breakdown in families, the deinstitutionalization of the mentally ill.

 The explosion of crack cocaine in American inner cities.

 The “Just Say No” campaign -> led by First Lady Nancy Reagan.

 The expansion of the “War on Drugs;” massive increase in prison population.

 The AIDS epidemic and a slow federal government response.

80’s Pop Culture

• John Lennon shot and killed

• Music: Michael Jackson, Whitney Houston, Madonna, Cindy Lauper, Beastie Boys, Run DMC, the cure, Bon Jovi, Bruce Springsteen, etc

• MTV: music videos were huge - originally did not support having Black artists but when MJ became super popular they wanted him on

Reagan vs. the “Evil Empire”

• At the beginning of Reagan’s Presidency, he took a hard line against the Soviet Union and communism.

• Reagan saw the Soviet Union as the focus of evil in the world, and an evil empire

• Reagan’s goals: restoring American power while intensifying the competition with the Soviet Union and resisting communism everywhere

• The Soviet war in Afghanistan which had started in 1979 continues

• The Soviet Union dominated the nations of Eastern Europe: they crush a pro democracy movement in Poland in 1981

• U.S and Soviet Union begin a massive military build up on both sides.

• The advent of the B-1 bomber, MX missile, etc

• The U.S navy expands from 450-600 ships.

• Reagan’s Strategic Defense Initiative: a space based ladder system to defend against nuclear missile attack announced in 1983 - Star Wars

A thaw in the Cold War

• Mikhail Gorbachev became the new leader of the Soviet Union in 1985

• A reformer who brought about new freedom in the USSR

• Glasnost: openness in the activities of state institutions and freedom of information

• Perestroika: private enterprise and the end of centralized economic planning

Improved US/Soviet Relations

• the Soviet Union was undergoing a major economic crisis in the 1980’s created by a arms race with the US and significant internal problems

• 1987: both sides agree to remove and destroy all intermediate nuclear missiles(the INF treaty).

• USSR begins to withdraw from Afghanistan in 1988

• By the end of Reagan’s 2nd term, the Cold War was virtually over!

• Reagan’s June 12, 1987 speech: Tear Down This Wall

Reagan in the Middle East

• The Iran-Iraq War dominated the region from 1980 to 1988

• The US supported Saddam Hussein and Iraq as a counter to revolutionary Iran

• In 1982, Israel, with U.S backing invaded Lebanon to target Palestine Liberation Organization forces

• In 1983 Regan deployed about 2,000 U.S marines to Lebanon as part of a multinational peacekeeping force amid the Lebanese Civil War

• On October 23,1983, a suicide truck bombing of Marine barracks in Beirut killed 241 U.S service members and 68 French troops

• Following the attack, the multinational peacekeeping force withdrew from Lebanon in 1984

Regan in Latin America

On October 25,1983, just two days after the Beirut bombing, the US launched an invasion of Grenada to overthrow a pro communist government aligned with Cuba and restore a pro American regime

• the operation was swift, resulting in 19 U.S deaths and 116 wounded

• In Nicaragua, the leftist Sandinista administration overthrew dictator Anastasio Somoza in 1979

• The CIA supported the anti communist contras with funding, training, and weapons

• After congress passed the Boland Amendment(1985) the administration continued aiding the contras secretly, contributing to the Iran-contra affair.

• In El Salvador a civil war erupted in 1979 as leftist guerrilas fought the U.S backed military government.

• The u.s provided billions in aid and trained Salvadoran troops despite widespread human rights abuses by military linked death squads

• By 1988 the conflict had claimed roughly 40,000 lives.

Second Term Scandal