The Reagan Revolution

Domestic and Foreign Policy during the Reagan Administration

reaganomics/supply-side economics (5 pillars)

a set of conservative economic principles aimed at stimulating economic growth, reducing government intervention in the economy, and promoting free-market capitalism

• tax cuts

• deregulation

• monetary policy

• defense spending

• anti-union policy

federal tax cuts (reaganomics)

• Economic Recovery Act of 1981

  • 25 percent decrease in personal income taxes

  • cuts in other taxes for both people and businesses

  • a large share of the tax relief went to upper-income taxpayers

deregulation (reaganomics)

• "getting government off the backs of the people"

• reduced federal regulations on business and industry

monetary policy (reaganomics)

• a policy of monetary restraint to combat inflation

• his administration worked closely with the Federal Reserve to tighten monetary policy, leading to higher interest rates in the early 1980s

defense spending (reaganomics)

• investing heavily in the military to strengthen national security and project American strength abroad

• increased defense spending contributed to economic growth by stimulating demand in industries related to defense production

anti-union policy (reaganomics)

• Reagan fired thousands of striking federal air traffic controllers for violating their contract and decertified their union (PATCO)

• Many businesses followed this action by hiring striker replacements in labor conflicts

• decline of union membership among nonfarm workers from more than 30 percent in 1962 to only 12 percent in the late 1990s.

recession of 1982

• the nation suffered the worst recession since the depression

• Banks failed

• unemployment reached 11 percent

• the recession, along with a fall in oil prices, reduced the double-digit inflation rate of the late 1970s to less than 4 percent

1983 Economic Recovery

• As the policies of Reaganomics took hold, the economy rebounded and beginning in 1983 entered a long period of recovery

• recovery widened the income gap between rich and poor

  • Higher-income groups enjoyed higher incomes from a deregulated marketplace

  • the standard of living of the middle class remained stagnant or declined

higher income groups of the 1980s

• well-educated workers

• "yuppies" (young urban professionals)

Reagan’s conservative judges

• Sandra Day O'Connor

• Antonin Scalia

• Anthony Kennedy

they helped scale back affirmative action in hiring and promotions, and limited Roe v. Wade by allowing states to impose certain restrictions on abortion

the first woman on the Supreme Court

Sandra Day O'Connor

National Rainbow Coalition

Founded by Jesse Jackson during his presidential campaign in the 1984 Democratic primaries.

The coalition aimed to unite various marginalized groups, including African Americans, Hispanics, Native Americans, Asian Americans, women, labor unions, and progressive activists, under a common political agenda.

It sought to build a diverse and inclusive movement that could address issues of social justice, economic equality, and civil rights.

Reagan’s 1984 campaign theme

an optimistic "It's Morning Again in America"

What percentage of white males voted for Reagan?

2/3

By 1984 only two groups still favored the Democrats:

• African-Americans

• those earning less than $12,500 a year

What happened to the national debt during the Reagan administration?

tripled from about $900 billion to almost $2.7 trillion

What did Reagan famously call the USSR?

"the evil empire"

Reagan Doctrine

Pledged that the US would support any world regime that was anti-communist

Foreign policy in Central America

Reagan supported "friendly" right-wing dictators to keep out communism

Foreign policy in Nicaragua

• In Nicaragua in 1979, a Marxist movement known as the Sandinistas had overthrown the country's dictator

• In response, the United States provided significant military aid to the "contras" in their effort to dislodge the Sandinistas

• In 1985, Democrats opposed to the administration's policies in Nicaragua passed the Boland Amendments, which prohibited further aid to the contras.

contras

a counter-revolutionary rebel group in Nicaragua that fought against the Sandinista government

Boland Amendments

prohibited US aid to contras

Foreign policy in El Salvador

the Reagan administration spent nearly $5 billion to support the Salvadoran government against a coalition of leftist guerrillas

Foreign policy in Grenada

• a coup led to the establishment of a pro-Cuban regime

• In October 1983, President Reagan ordered a small force of marines to invade the island in order to prevent the establishment of a strategic Communist military base in the Americas.

• The invasion quickly succeeded in re-establishing a pro-U.S. government in Grenada.

Iran-Contra Affair

The scandal came to light in November 1986 when news reports revealed the Reagan administration's secret arms deals with Iran. It was revealed that funds from the arms sales to Iran had been diverted to support the Contras, bypassing congressional restrictions known as the Boland Amendments, which prohibited direct or indirect U.S. assistance to the Contras.

Mikhail Gorbachev attempted to change Soviet domestic politics by introducing two major reforms:

1. glasnost - openness, to end political repression and move toward greater political freedom for Soviet citizens

2. perestroika - restructuring of the Soviet economy by introducing some free-market practices

glasnost

openness, to end political repression and move toward greater political freedom for Soviet citizens

perestroika

restructuring of the Soviet economy by introducing some free-market practices

To achieve his reforms, Gorbachev wanted to end …

the costly arms race and deal with a deteriorating Soviet economy

In 1987, President Reagan challenged the Soviet leader to follow through with his reforms. In front of Brandenburg Gate and the Berlin Wall, a divisive symbol of the Cold War, Reagan ended his speech with the line, …

"Mr. Gorbachev, tear down this wall."

INF agreement (1987)

Gorbachev and Reagan agreed to remove and destroy all intermediate-range missiles

Where did Gorbachev start the pullout of Soviet troops from in 1988?

Afghanistan

Reagan’s nickname

"the Great Communicator”