Conservative Resurgence, 1980-2000

Conservative Resurgence, 1980-2000

• President Ronald Reagan's Inaugural Address (January 20, 1981): "In this present crisis, government is not the solution to our problem; government is the problem."
• Key changes during the 1980s and 1990s:
  • Collapse of communism in Eastern Europe.
  • Breakup of the Soviet Union.
  • End of the Cold War.
  • Reemergence of ethnic and religious conflicts.
• Domestic scene: Reagan administration's conservative agenda:
  • Stronger military.
  • Lower taxes.
  • Fewer social programs.
  • Traditional cultural values.
  • Result: Republican dominance in national politics.

The Rise of Conservatism

• Barry Goldwater's 1964 campaign: Marked the beginning of the resurgence of conservatism, despite his defeat.
• Policies of Nixon and Ford:
  • Writings of William F. Buckley Jr. and Milton Friedman.
  • Evidence of a shift to the right in the 1970s.
• By 1980: Coalition of economic and political conservatives, religious fundamentalists, and PACs.
  • Opposed big government, New Deal liberalism, gun control, feminism, gay rights, welfare, affirmative action, sexual permissiveness, abortion, and drug use.
  • Believed these issues undermined family and religious values, the work ethic, and national security.

Leading Issues

• Conservative agenda for the nation: Lower taxes, changed morals, and reduced emphasis on affirmative action.
• Taxpayers' Revolt:
  • 1978: California voters passed Proposition 13, sharply cutting property taxes.
  • Conservatives promoted Arthur Laffer's belief that tax cuts would increase government revenues.
  • Kemp-Roth proposal: Legislation to reduce federal taxes by 30 percent became the basis for the Reagan tax cuts.
• Conservative Religious Revival:
  • Moral decay as a theme of religious leaders on television (Pat Robertson, Oral Roberts, Jim Baker).
  • Televangelists had a large weekly audience.
  • Jerry Falwell founded the Moral Majority, financing campaigns to unseat liberal members of Congress.
  • Religious fundamentalists attacked "secular humanism" and campaigned for the return of prayers and the teaching of the Biblical account of creation in public schools.
  • Legalization of abortion in Roe v. Wade (1973) sparked the right-to-life movement uniting Catholics and fundamentalist Protestants.
• Elimination of Racial Preferences:
  • 1965: President Johnson committed the U.S. government to affirmative action.
  • Many whites blamed their troubles on affirmative action, calling it "reverse discrimination."
  • Regents of the University of California v. Bakke (1978): Supreme Court ruled against racial quotas but allowed race to be considered.
  • Conservatives intensified their campaign to end all preferences based on race and ethnicity.
• De-Regulation of Business:
  • Business interests campaigned to influence governments to curtail regulations, lower taxes, and weaken labor unions.
  • Creation of “think tanks” (American Enterprise Institute, Heritage Foundation, Cato Institute) to promote free-market ideas.
  • U.S. Chamber of Commerce lobbied for pro-business legislation.

Ronald Reagan and the Election of 1980

• Ronald Reagan: Fame as a political speaker in the 1964 Goldwater campaign, governor of California.
• By 1976: Leading spokesperson for conservative positions, almost defeated Ford for the nomination.
• Master of the media, champion of average Americans.
• Campaign for President, 1980:
  • Edward Kennedy's challenge left Carter battered.
  • Reagan attacked Democrats for expanding government and undermining U.S. prestige.
  • Reagan pointed to a “misery index” of 28 (inflation + unemployment).
  • Concluding question: "Are you better off now than you were four years ago?"
• Significance:
  • Reagan broke up a key element of the New Deal coalition.
  • Republicans gained control of the Senate for the first time since 1954.
  • Republicans also gained 33 seats in the House, creating a working majority with conservative southern Democrats.
  • The 1980 election ended a half-century of Democratic dominance of Congress.

The Reagan Revolution

• Iranians released the 52 American hostages on Reagan's inauguration day.
• Reagan survived a serious gunshot wound.
• Pledged to lower taxes, reduce government spending, build up the U.S. armed forces, and create a more conservative federal court.

Supply-Side Economics ("Reaganomics")

• Tax cuts and reduced government spending would increase investment, leading to increased production, jobs, and prosperity.
• Contrasted with Keynesian economics.
• Critics compared it to the "trickle-down" economics of the 1920s.
• Federal Tax Reduction:
  • Congress passed the Economic Recovery Act of 1981: 25 percent decrease in personal income taxes over three years.
  • Cuts in corporate income tax, capital gains tax, and gift and inheritance taxes.
  • Top income tax rate reduced to 28 percent.
  • Investors were allowed to invest up to $2,000$ a year in Individual Retirement Accounts (IRAs) without paying taxes on this money.
• Spending Cuts:
  • Republicans cut more than $40$ billion from domestic programs.
  • Savings offset by increased military spending.
  • No cuts in Medicare or Social Security, but a bipartisan bill was signed into law to strengthen Social Security.
  • Increased individual contributions.
  • Raised the age for full benefits to 67.
  • Taxed some benefits paid to upper-income recipients.

Deregulation

• Reduced federal regulations on business and industry.
• Restrictions eased on savings and loan institutions, mergers and takeovers, and environmental protection.
• Regulations on emissions and auto safety were reduced.
• Secretary of the Interior James Watt opened federal lands for increased coal and timber production and offshore waters for oil drilling.

Labor Unions

• Reagan took a tough stand against unions, firing striking air traffic controllers and decertifying their union (PATCO).
• Businesses followed this action by hiring striker replacements in labor conflicts.
• Anti-union policies along with the loss of manufacturing jobs hastened the decline of union membership among nonfarm workers.
• The Recession of 1982 and foreign competition had a dampening effect on workers' wages.

Recession and Recovery

• 1982: Worst recession since the 1930s, with bank failures and 11 percent unemployment.
• Recession and fall in oil prices reduced the double-digit inflation rate of the late 1970s to less than 4 percent.
• Economy rebounded in 1983.
• The recovery widened the income gap between rich and poor.
• The standard of living of the middle class remained stagnant or declined.

Social Issues

• President Reagan appointed conservative judges to the Supreme Court (Sandra Day O'Connor, Antonin Scalia, and Anthony Kennedy).
• Supreme Court, led by William Rehnquist, scaled back affirmative action and limited Roe v. Wade.

The Election of 1984

• Return of prosperity restored public confidence in the Reagan administration.
• Republicans nominated Reagan by acclamation.
• Jesse Jackson made a strong run for the presidency.
• Democrats nominated Walter Mondale and Geraldine Ferraro.
• Reagan campaigned on an optimistic theme.
• Reagan won every state except Minnesota.

Budget and Trade Deficits

• By the mid-1980s, federal deficits were more than $200$ billion a year.
• The national debt tripled from about $900$ billion to almost $2.7$ trillion.
• The U.S. trade deficit reached $150$ billion a year.
• The cumulative trade imbalance of $1$ trillion during the 1980s contributed to an increase in foreign ownership of U.S. real estate and industry.
• In 1985, the United States became a debtor nation.
• Congress passed the Gramm-Rudman-Hollings Balanced Budget Act in 1985, reducing the deficit by $66$ billion from 1986 to 1988.

Impact of Reaganomics

• Reduced restrictions on a free-market economy.
• Succeeded in containing the growth of the New Deal-Great Society welfare state.
• Resulted in huge federal deficits of $200$ to $300$ billion a year.

Foreign Policy During the Reagan Years

• Reagan wanted to restore the military might and superpower prestige of the United States and to intensify the Cold War competition with the Soviet Union.
• Called the Soviet Communists "the evil empire."
• Prepared to use military force.
• During his second term, he proved flexible in his foreign policy.

Renewing the Cold War

• Increased spending for defense and aid to anti-communist forces in Latin America.
• Military Buildup:
  • Spent billions to build new weapons systems (B-1 bomber and the MX missile) and to expand the U.S. Navy from 450 to 600 ships.
  • Increased spending on the Strategic Defense Initiative (SDI).
  • Defense budget grew from $171$ billion in 1981 to more than $300$ billion in 1985.
• Central America:
  • Supported right-wing dictators.
  • Provided military aid to the "contras" in Nicaragua.
  • 1985: The Boland Amendment prohibited further aid to the contras.
  • Spent nearly $5$ billion to support the Salvadoran government.
• Grenada:
  • Invaded the island in 1983 to prevent the establishment of a Communist military base.
  • Re-established a pro-U.S. government.
• Iran-Contra Affair:
  • Secret plan of selling U.S. antitank and anti-aircraft missiles to Iran.
  • Profits of the arms deal were used to fund the contras in Nicaragua.
  • President Reagan denied knowledge of the illegal diversion of funds.
  • Suffered a sharp, but temporary, drop in the popularity polls.
• Lebanon, Israel, and the PLO:
  • Israel invaded southern Lebanon in 1982.
  • The United States sent peacekeeping forces.
  • April 1983: An Arab suicide squad bombed the U.S. embassy in Beirut, killing 63 people.
  • Another Arab terrorist drove a bomb-filled truck into the U.S. Marines barracks, killing 241 servicemen.
  • Reagan pulled U.S. forces out of Lebanon in 1984.
  • PLO leader Yasser Arafat agreed in 1988 to recognize Israel's right to exist.

Improved U.S.-Soviet Relations

• Cold War intensified in the early 1980s.
• 1985: Mikhail Gorbachev became the new Soviet leader.
• Gorbachev introduced glasnost and perestroika.
• Gorbachev wanted to end the costly arms race.
• 1987: Reagan challenged Gorbachev to tear down the Berlin Wall.
• Gorbachev and Reagan agreed to remove and destroy all intermediate-range missiles (the INF agreement).
• 1988: Gorbachev started the pullout of Soviet troops from Afghanistan.
• By the end of Reagan's second term, superpower relations had so improved that the end of the Cold War seemed at hand.

Assessing Reagan's Policy

• The Reagan administration argued that its military buildup forced the Soviet Union to concede defeat and abandon the Cold War.
• Gorbachev ended the Cold War in order to reform the troubled Communist economic and political system.
• Whatever caused the Soviets to change their policy, Reagan responded by seizing the opportunity to end the Cold War.
• By the end of Reagan's second term in 1988, his combination of style, humor, and expressions of patriotism had won over the electorate.
• He changed the politics of the nation for at least a generation by bringing many former Democrats into the Republican party.

George H. W. Bush and the End of the Cold War

• George H. W. Bush defined the country's role in the new era.
• The Election of 1988:
  • Democrats regained control of the Senate in 1986.
  • Michael Dukakis won the Democratic nomination.
  • The Republican candidates were George H. W. Bush and Dan Quayle.
  • Bush overtook Dukakis by charging that the Democrat was soft on crime and weak on national defense.
  • Bush also appealed to voters by promising not to raise taxes: "Read my lips no new taxes.”
  • The Republicans won a decisive victory in November by a margin of 7 million votes.
• The Collapse of Soviet Communism and the Soviet Union:
  • Tiananmen Square: Prodemocracy students demonstrated for freedom, but the Chinese Communist government crushed the protest with tanks.
  • Eastern Europe: The Communist party fell from power in one country after another.
  • The two Germanys were finally reunited in October 1990.
  • Breakup of the Soviet Union: The Soviet Baltic republics declared their independence.
  • The remaining republics dissolved the Soviet Union in December 1991.
  • Boris Yeltsin disbanded the Communist party in Russia and attempted to establish a democracy and a free-market economy.
• End of the Cold War: Bush and Gorbachev signed the START I agreement in 1991, reducing the number of nuclear warheads to under $10,000$ for each side.
• In late 1992, Bush and Yeltsin agreed to a START II treaty, which reduced the number of nuclear weapons to just over $3,000$ each.
• Civil wars and violence in the former Soviet Union caused concern.
• The end of the Cold War raised questions about whether the United States needed such heavy defense spending.

Invasion of Panama

• December 1989: Bush ordered the invasion of Panama to remove General Manuel Noriega.
• The purpose of the invasion was to stop Noriega from using his country as a drug pipeline to the United States.
• U.S. troops remained until elections established a more credible government.

Persian Gulf War

• August 1990: Iraq's dictator, Saddam Hussein, invaded Kuwait.
• Bush built a coalition of United Nations members to pressure Hussein to withdraw from Kuwait.
• Bush won congressional approval for a military campaign.
• January 1991: Operation Desert Storm: More than 500,00 Americans were joined by military units from 28 other nations.
• After only 100 hours of fighting on the ground, Iraq conceded defeat.

Domestic Problems

• Nomination of Clarence Thomas: Thomas's conservative views and charges of sexual harassment angered African Americans and women.
• Taxes and the Economy: The government's intervention to save weak savings and loan institutions (S&Ls) would cost the taxpayers.