Carter, Reagan, and the End of the Cold War

Carter and Human Rights

  • During the Cold War, the U.S. supported right-wing regimes to stop communism.
  • Many of these regimes used force, torture, and terror.
  • President Jimmy Carter emphasized human rights in foreign policy, believing it should reflect American moral beliefs.
  • In 1977, Congress required reports on human rights conditions in countries receiving U.S. aid.

Iran: A Case Study

  • Iran was a key U.S. ally in the Middle East since WWII.
  • 1953: The CIA helped secure the Shah's power, Mohammad Reza Pahlavi.
  • The Shah allowed U.S. electronic listening posts in Northern Iran along the Soviet border.
  • During the 1973-1974 Arab oil embargo, Iran continued to sell oil to the U.S.
  • Iran bought arms from the U.S., which helped the American balance of payments.
  • Carter initially overlooked the Shah's human rights violations.
  • Carter visited Iran in 1977, calling it "an island of stability"
  • He praised the Shah, this view was not shared by many impoverished Iranians.
  • Masses of Iranians, led by Islamic clergy, opposed the Shah’s Westernization policies.
  • 1978: Revolutionary surges grew, leading the Shah to alternate between suppression and liberalization.
  • Carter vacillated on whether to firmly support the Shah or prepare for a new Iranian government.

Iranian Revolution and Hostage Crisis

  • January 1979: The Shah fled to Egypt.
  • Ayatollah Ruholla Khomeini returned, calling the U.S. the "Great Satan."
  • Relations worsened, especially after Carter allowed the Shah into the U.S. for lymphoma treatment.
  • November 4, 1979: Iranian supporters of Khomeini invaded the U.S. Embassy in Tehran, capturing 66 Americans.
  • 13 hostages were released weeks later, but the rest were held for 444 days.
  • Carter was seen as helpless because Iran was unstable and its demands (Shah's return and U.S. guilt admission) were unacceptable.
  • Carter devoted significant attention to the hostage crisis.
  • December 1979: The Soviet Union invaded Afghanistan.
  • The Carter administration embargoed grain and high-tech exports to the Soviet Union and boycotted the 1980 Moscow Olympics.
  • Advisers suggested using force, but an attempted rescue mission failed.
  • Negotiations led to the hostages' release, but only after Ronald Reagan took office.

Reagan Revolution

  • The 1970s: Watergate, stagflation, energy crisis, Vietnam defeat, and the Iranian hostage crisis caused a loss of confidence among Americans.
  • There were concerns about declining American strength, productivity, and the power of special-interest groups.
  • Ronald Reagan capitalized on public frustration.
  • 1980: Reagan asked, "Are you better off than you were four years ago?" Annual inflation was at 18 percent.
  • Reagan won a landslide victory and the Republicans gained control of the Senate.
  • Reagan's Background:
    • Movie actor a television announcer.
    • Born in 1911, grew up in Illinois.
    • Sportscaster then actor in 50 films.
    • President of the Screen Actors Guild.
    • Hosted "GE Theater" and "Death Valley Days."
  • Political Shift:
    • Started as a liberal supporting FDR and the New Deal.
    • Concerned about Communist infiltration in Hollywood.
    • 1964: Supported Barry Goldwater.
    • Governor of California, promising spending cuts and action against student protesters.
  • Reagan drew support from white southerners, Roman Catholics, evangelical Christians, and the New Right.
  • The New Right opposed the perceived erosion of values in America.
  • Reagan's Promises:
    • Rebuild defenses.
    • Restore economic growth.
    • Reduce the size of the federal government.
    • End union contracts.
    • Cut taxes.
    • Decontrol businesses.
  • Despite mixed results, many Americans felt Reagan improved the economy.

Reaganomics

  • Reagan blamed economic problems on declining capital investment and a tax structure against work and investment.
  • Tax Cuts:
    • 1981: Congress cut taxes by 5% in 1981 and 10% in 1982 and 1983.
    • 1986: Reduced top tax rates to 28% while closing loopholes.
  • Labor:
    • 1981: Fired 15,000 striking air-traffic controllers, which boosted his popularity.
  • Defense: Doubled the defense budget to over 330 billion by 1987.
  • Deregulation: Expanded efforts to deregulate the economy.
    • Congress deregulated banking and natural gas.
    • Lifted ceilings on interest rates and price controls on airfares.
    • The EPA relaxed Clean Air Act enforcement.
    • The Interior Department opened federal lands to private development.
  • Results of Deregulation:
    • Bank interest rates became competitive, but smaller banks struggled.
    • Natural gas prices and production increased.
    • Airfares dropped on high-traffic routes but increased on low-traffic routes.
    • Overall, deregulation increased short-term competition but also led to business failures and consolidation.
  • Social Programs:
    • Limited benefits to the "truly needy."
    • Cut spending on programs like Aid to Families with Dependent Children, food stamps, and job training.
    • Eliminated welfare assistance for the working poor and reduced child-care subsidies.
    • Attempted to count ketchup as a vegetable in school lunches.

Economic Outcomes and the Celebration of Wealth

  • Economy: Longest post-WWII expansion during Reagan's tenure.
  • Disposable personal income rose 20% after 1980.
  • Inflation fell from 13% in 1981 to under 4% annually.
  • Unemployment dropped to approximately 5%.
  • Criticisms:
    • Massive federal budget deficit, increasing 1.5 trillion during his presidency.
    • Growing income gap between rich and poor.
    • Costs of cleaning up nuclear weapons facilities and bailing out the savings and loans industry.
  • Celebration of Wealth:
    • TV show "Dynasty" reflected the glamour and greed of the 1980s.
    • Corporate mergers and takeovers boomed, financed by “junk bonds.”
    • Corporate raiders like Michael Milken made huge profits.
    • Milken earned 550 million in 1987.
    • 100,000 Americans became millionaires yearly.
    • The bottom 20% saw annual earnings fall from 9,376 to 8,800.
    • Many new jobs were in low-wage service industries.
  • Financial Excesses:
    • October 19, 1987: The Dow Jones fell 508 points (a 22.6% plunge).
    • Stock brokerage firms laid off employees.
    • Milken was indicted for racketeering and securities fraud.
    • Drexel Burnham Lambert fined 650 million and filed for bankruptcy.
    • Ivan Boesky fined 100 million for insider trading and jailed.

The Reagan Doctrine

  • Cold War tensions intensified during the early Reagan years.
  • Reagan called the Soviet Union an "evil empire."
  • He proposed a space-based missile defense system ("Star Wars").
  • The Reagan administration viewed regional conflicts through a Cold War lens.
  • Grenada:
    • 1983: Prime Minister Maurice Bishop assassinated, a Marxist government took power.
    • Soviet money and Cuban troops arrived.
    • The U.S. invaded Grenada, removed the Communists, and installed a pro-American regime.
  • The Reagan Doctrine (1985): Pledged support for anti-Communist revolutions.
  • Afghanistan: Provided aid to anti-Soviet freedom fighters.
  • Nicaragua:
    • 1979: Nicaraguans revolted against the Somoza regime. The Sandinistas took power.
    • The Sandinistas postponed elections, exiled opposition leaders, and sought aid from the Soviet bloc.
    • Reagan saw Nicaragua as "another Cuba."
    • Reagan approved covert training of anti-Sandinista rebels ("contras").
    • 1984: Congress ended covert aid to the contras.
    • The Reagan administration solicited contributions from private individuals and foreign governments.
    • Arms were sold to Iran, and profits were diverted to the contras.
    • The Iran-Contra affair was exposed in 1986, weakening the president.
    • 1987: A regional peace plan was purposed by President Oscar Arias Sanches of Costa Rica.
    • 1990: The Nicaraguan opposition defeated the Sandinistas in national elections.

Reagan and Gorbachev

  • 1982: Soviet leader Leonid Brezhnev died. His regime was marked by stagnation, corruption, and a military buildup.
  • The post-Brezhnev era initially saw little change. Yuri Andropov and Konstantin Chernenko succeeded Brezhnev.
  • 1985: Mikhail S. Gorbachev became the Soviet leader.
  • Gorbachev:
    • Called for political liberalization (glasnost) and economic reform (perestroika).
    • Allowed freedom of press, assembly, travel, and religion.
    • Ended the Communist party's monopoly on power.
    • Created the Soviet Union's first legislature.
    • Allowed competitive elections in 1989.
    • Freed political prisoners.
    • Legalized small private business cooperatives.
    • Relaxed laws on land ownership.
    • Approved foreign investment.
  • Foreign Affairs:
    • Cut the Soviet defense budget.
    • Withdrew Soviet troops from Afghanistan and Eastern Europe.
    • Allowed a unified Germany to join NATO.
    • Agreed with the U.S. to destroy short-range and medium-range nuclear weapons.
    • Promoted democratization in Eastern Europe.
    • Awarded the 1990 Nobel Peace Prize.

Reagan Revolution in Perspective

  • 1984: Reagan and George Bush won a landslide victory against Walter Mondale and Geraldine Ferraro (first woman nominated for vice president).
  • Reagan left office popular despite the Iran-Contra scandal.
  • He was the first president to serve two full terms since Eisenhower.
  • Accomplishments:
    • Dampened inflation.
    • Restored public confidence.
    • Presided over the end of the Cold War.
    • Doubled the defense budget.
    • Appointed the first woman to the Supreme Court.
    • Launched an economic boom.
    • Created national unity.
    • Restored vigor and patriotism.
    • Rebuilt military might.
    • Championed traditional family values.
  • Criticisms:
    • Reckless use of military power.
    • Circumventing Congress.
    • Fostering greed and intolerance.
    • Cutting the social safety net.
    • Insensitivity on racial issues.
    • Economic Legacy:
      • National debt tripled, from 909 billion to almost 2.9 trillion.
      • Interest amounted to 14% of the federal budget.
      • Deficit soaked up savings and raised interest rates.
      • Forced the federal government to shift responsibilities to the states.
      • Corporate and individual debt soared.
      • The U.S. consumed 1 trillion more goods and services than it produced.
      • The U.S. became the world's biggest debtor nation due to a weak dollar, low exports, and the need to borrow to finance deficits.