Transcript 1980s

1980’s
Reagan and the
Resurgence of
Conservatism
Morning in America

In 1980, Census figures confirmed the average
American was older and many have moved to either the
South or West, bastions of the Old Right.
 In addition, there movement known as the New Right
was emerging, in response partly to the counterculture
protests of the 1960’s.
 Many concerned with cultural or social issues as
opposed to economic:
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Denounced abortion, pornography, homosexuality, feminism,
and affirmative action.
Championed prayer in schools and tough penalties for criminals.
With the New and Old Right, a new powerful
conservative movement started to take form in the late
70’s early 80’s
Election of 1980
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Reagan was a perfect match for the emerging
conservative movement:
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Grew up before the social upheavals of the 60’s, so
he naturally sided with New Right on social issues
He also chided the activist government of the Great
Society and its social engineering
Economically speaking, he supported conservative
values.
Reagan supported the “common man” against the big
government
Reagan attempted to convince Democratic working
class and lower-middle-class white voters that the
Democratic party became the party of big government
and of minority constituents and no longer supported
their cause.
President
Ronald
Reagan
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The oldest man ever
elected to the
presidency, Reagan
displayed youthful vigor
both on the campaign
trail and in office.
Galen Rowell/ CORBIS
Election of 1980
 Neoconservatives
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Group of advisors that Reagan relied on to
help develop policy and agendas
Neocons championed the following:
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Free market supply side capitalism
Harsh anti-Soviet position
Questioned liberal welfare programs
Questioned affirmative action
Called for a return to traditional values of respect
for the individual and the importance of family.
Election of 1980
 Reagan
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Was an B-list actor in the 1940’s who started
out as a sports announcer in Iowa in the 30’s
Was president of the Screen Actors Guild,
where he purged their ranks of communists.
In 1950’s was a spokesperson for GE, and he
started to doubt the efficacy of the New Deal
and turned to more conservative values
He began his political career in 1966 when he
was elected Governor of California.
Election of 1980
 Carter
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His administration was not looked upon
favorably
Considered to be bungling and befuddled.
Inflation was high, double digit levels
Even amongst Democrats, many doubted
Carter (ABC’s)
Edward Kennedy and Carter slugged it out in
Democratic Primaries
Election of 1980
 Reagan's
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Attacked Carter’s foreign policy performance
Blasted the big government policy of the
Democratic party
Regan also attacked the fumbling economy,
high interest rates, and double digit inflation
 Carter’s
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campaign
campaign
Tied to label Regan as a trigger happy
cowboy who would lead US into war
Presidential Election of 1980 (with
electoral vote by state)

This map graphically displays Reagan’s landslide victory over
both Carter and Anderson. Also noteworthy, is the Senate was
controlled by the Republicans too
Copyright (c) Houghton Mifflin Company. All Rights Reserved.
Carter’s Legacy

Carter tried valiantly as president, but was
crippled by his lack of managerial talent and
rising inflation, oil costs, and hostage crisis in
Iran
 In his Farewell Address, he noted how he
attempted to scale down the nuclear arms race,
promote human rights, and protect the
environment.
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Signed bill preserving 100 million acres of forest in
Alaska
After the presidency, Carter took on the role of
unofficial US Ambassador to eh world and
championed worthy causes such as
humanitarian and human rights. Won Nobel
Peace Prize in 2002
The Triumph of the Right, 1980

Republican conservatives scored a double victory in 1980,
winning control of both the White House and the Senate. Aided
by conservative Democratic “boll weevils,” they also dominated
the House of Representatives, and a new era of conservatism
dawned in the nation’s capital.
King Features Syndicate, Inc.
Reagan Revolution
 Goals:
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Dismantle the welfare state and reversal of
the liberal polices from the previous 50 years.
Create a smaller government that is fiscally fit
and also financially leaner
Government is not the solution to our
problems, it is the problem” (Inaugural
Address)
Compared the New Deal and Great Society
federal government to a baby, appetite at one
end but no responsibility at the other.
Reagan Revolution
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Why did his conservative message have an
audience?
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Federal Spending rose from 18 percent of GNP to 23
percent of GNP
Government shifted from Defense to entitlement
programs such as Social Security, Welfare, and
Medicare/Medicaid
After 4 decades of new Deal and Great Society
programs, public turned to a new idea of government
Reagan pushed for cuts of 54 billion, mostly to social
programs
Convinced Southern Democrats known as Boll
Weevils to support his policies.
Assassination Attempt
 On
March 6, 1981, as Reagan was leaving
a Washington hotel, a man shot (John
Hinckley Jr) him under his left arm and
punctured his lungs.
 Miraculously, for a man his age, Reagan
recovered and was back to work in 12
days.
 The incident further increased his
popularity as he proved to be tough and
dedicated to the task at hand.
Reagan and the Budget
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Budget proposal
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Wanted 25% percent cuts across the board over 3
years
1981, Congress lowered individual tax rates, reduced
estate taxes, and created tax-free savings plans for
investors
Believed budgetary responsibility coupled with tax
reductions would stimulate new growth and
investment.
Eventually, the government would benefit with
increased tax dollars from more Americans working.
Thus, trickle down or supply side economics.
Reagan and the Budget
 But,
at first the supply side economics
seemed to be a theory that simply did not
work:
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In 1981, the economy slipped into a deep
recession, worst since 1930’s.
Unemployment reached 11 percent and
banks closed
Car companies did horribly
Democrats screamed that the budget cuts
were focused on poor and handicapped and
tax cuts favored wealthy.
Wallflowers
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Reagan’s budget cuts fell almost exclusively on social programs,
whereas military outlays increased substantially.
Mazzotta/ Ft. Myers News/ Rothco
Reagan and the Budget
 In
1983, the economy started to make a
recovery and the supply-siders felt
vindicated.
 However, important to note that the
economy of the 1980’s saw a widening
gap in wealth distribution
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Basically, rich got richer and the poor got
poorer. Middle incomes stayed relatively the
same, with small dips.
Reagan and the Budget
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However, some economists argue it was neither
the spending of the wealthy class nor supplyside economics that caused the economy to
improve, it was simply military expenditures.
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Reagan spent 2 trillion dollars on the military in the
1980’s in a desire to win the arms race.
As a result, Regan through the federal budget into
huge deficits, that made the New Deal seem small.
• 100 billion in 1982 and 200 billion each year after.
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Interest rates high, which caused dollar to soar, which
meant exporting was difficult. Consequently, trade
deficit also increased and America became heavy
borrowers.
What?
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When Interest rates are high, it becomes more
expensive to borrow money? So banks lend out
less money than before.
 Less money means less supply of dollars which
equals an increase in the worth of the dollar.
 So, let’s buy some wine in Paris:
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In 1982, it cost 5 francs for a bottle of wine
• Exchange rate was 1 dollar equals 5 francs. So it cost 1
dollar to buy a bottle of wine.
• But in 1984, the exchange rate was 1 dollar to 10 francs. So
how much does that bottle of wine cost an American tourist in
1984.
• $.50
What?
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However, the opposite hurts American
exporters.
 Parisian wants to buy California wine:
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In 1982, it cost 5 dollars for a bottle of Californian red,
so it France it cost 25 francs
But in 1984, with an exchange rate of 1:10, that bottle
of wine costs a Frenchman 50 francs.
Guess whose wine is not going to be bought.
For an American tourist or buyer of foreign
goods, high dollar is good
 But for exporters, it is bad because American
goods become more expensive. Thus, the trade
deficit in the 80’s
Reagan and the Cold War
 Reagan’s
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theory:
Soviets equal real bad
To defeat, need to negotiate from position of
strength.
Strength comes from military.
American economy and system can handle
stress of increased military expenditures, so
increase arm race and make Soviets spend
themselves to death.
To avoid economic ruin, Soviets would come
to the table to negotiate
Star Wars Fantasies
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President Reagan’s Strategic Defense Initiative (popularly known
as Star Wars) evoked extravagant hopes for an impermeable
defensive shield, but its daunting physical and engineering
requirements also occasioned much ridicule in the scientific
The Hartford Courant
community.
The Middle East
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A combination of political instability and precious
petroleum resources has made the region from Egypt
to Afghanistan an “arc of crisis.” Copyright (c) Houghton Mifflin Company. All Rights Reserved.
Middle East
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In 1982, Israel invaded Lebanon to get rid of
PLO who made attacks from the South into
Israel.
 Lebanon already was plagued by Civil War and
further chaos ensued as a result of the invasion.
 Reagan obliged to send troops in 1983 as aprt
of an international peace keeping force.
 In 1983, a Marine barracks was attacked by a
suicide bomber killing more than 200 Marines.
Sandinistas
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Revolutionaries and leftists in Nicaragua who
overthrew the long-time dictator in 1979. Carter
did not intervene, but Reagan was not about to
have any Commies in his backyard.
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Accused them of supporting Soviets and Cubans and
shipping weapons to El Salvador.
Reagan sent troops to prop up the pro-American
government in El Salvador
Also sent arms to the contra-rebels trying to get rid of
the Sandinistas in Nicaragua.
Also attacked Grenada because of a Marxist
government there. Overthrew the insurgents.
So Reagan was very much like TR in regards to Latin
America
Gorbachev
 Elected
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to be leader of Soviets in 1985
Wanted Glasnost and Perestroika
• Glasnost-openness, which meant a more open
society in the Soviet Union and allowed more free
speech and political liberty
• Perestroika-restructuring of the Soviet economy,
which wanted to allow more free market capitalist
ideas.
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Reagan organizes 4 summits with Gorbachev
from 1985-1988
East Meets West
 President
Reagan greets Soviet leader
Mikhail Gorbachev at a summit meeting
in Moscow in May 1988.
Reagan Presidential Library
Iran-Contra Affair
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Lebanon an issue and also Nicaragua.
 So how are these two connected?
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Give arms illegally to Iran for their help in getting
American hostages released in Lebanon
Use money raised from sell of arms to support the
Contra-Rebels against the Sandinistas.
This by-passed a Congressional freeze on the selling
of arms to Nicaragua rebels
Point is, the Reagan administration looked bad a
result and it made Reagan seem out of touch with
policy.
Contra Rebel Troops Head for Battle
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These rebels were long-seasoned and battle-scarred
veterans of Nicaragua’s civil war by the time this
photograph was taken in 1987.
Black Star/ Stockphoto.com
The National Debt, 1930–2002
Copyright (c) Houghton Mifflin Company. All Rights Reserved.
National Debt

World War II provided the first major boost to the national debt. But it
was the policies of the Reagan and George H. W. Bush
administrations, 1981-1993, that explosively expanded the debt to
the $4 trillion level. By the 1990s, 14 percent of federal revenues
went to interest payments on the debt. The budget surpluses
created by the booming economy of the second Clinton
administration (1997-2001) raised the prospect that the debt might
be paid off. But the combination of the George W. Bush tax cuts and
increased military spending sent the debt soaring again after 2001,
though a combination of lower interest rates and a growing economy
left federal interest payments as a percentage of GDP at their lowest
levels since the 1970s, about 1.4%. (Sources: Historical Statistics of
the United States, relevant years; 1996 and 1997 figures from
Economic Indicators, Council of Economic Advisors.)
Share of Income Received by Families, by
Quintile, 1970–2000
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Since 1980 the incomes of the lowest 20 percent and
the middle 60 percent have been shrinking, while the
incomes of the highest 20 percent, and particularly the
top 5 percent, have climbed steadily. (Source:
Statistical Abstract of the United States, 2003.)
Bailing Out the Banks
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Lax regulation and a booming real estate market
imperiled hundreds of financial institutions in the
1980s, necessitating a massive taxpayer-funded
bailout.
©Schwadron/ Rothco