Transcript What economic assumptions underlay “Reaganomics”?

OUT OF MANY
A HISTORY OF THE
AMERICAN PEOPLE
Chapter 30
The Conservative Ascendancy
1974 - 1991
CHAPTER FOCUS QUESTIONS
2
What explains the weakness in the U.S.
economy in the 1970s?
What did Ford and Carter accomplish as
presidents?
How successful was the environmentalist
movement of the 1970s?
What are the factors behind the rise of the
New Right?
How did the Iran hostage crisis affect the
election of 1980?
What economic assumptions underlay
“Reaganomics”?
Why did the gap between rich and poor grow
in the 1980s?
How did the Cold War end?
3
THE OVEREXTENDED
SOCIETY
• The energy crisis was the most vivid sign of a
troubled economy.
• Dependence on imported oil had steadily grown and
president Nixon ordered oil conservation measures.
4
Decline of U.S.
Oil
Consumption,
1975-81
Boycotts causing
shortages and
high prices
spurred the
reduction in oil
consumption.
However, in the
1980s
consumption
once again
began to rise to
reach record
highs.
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5
Source: Department of
Energy, Monthly Energy
Review, June 1982.
Union Membership,
1940-90 After
reaching a peak
during World War II,
union membership
steadily declined. In
the 1980s, overseas
production took an
especially big toll on
industrial unions.
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SOURCE: Bureau of Labor
Statistics, in Mary Kupiec et al., eds.,
Encyclopedia of American Social
History, Vol. II. New York:
Scribner’s, 1993, p. 4188.
SUNBELT/SNOWBELT
COMMUNITIES
Large-scale migration
fueled Sunbelt population
growth.
Sunbelt prosperity was not
evenly spread and a twotier class society
developed.
7
Snowbelt cities like
Philadelphia and New York
faced urban decay.
8
Population
Shifts, 1970–80
Industrial
decline in the
Northeast
coincided with
an economic
boom in the
Sunbelt,
encouraging
millions of
Americans to
head for warmer
climates and
better jobs.
SOURCE: U.S. Bureau of the Census.
9
Growth of Sunbelt Cities, 1940-80 The old industrial cities in the Northeast and
Midwest steadily lost population to the southern and western decentralized cities
and their surrounding suburbs.
THE ENDANGERED
ENVIRONMENT
The linking of cancer at Love
Canal to toxic waste raised U.S.
concern over pollution.
Growing interest in the concept
of ecology led Americans to
lobby for renewable energy
sources, protecting endangered
species, and reducing pollution.
10
Despite public outcries,
government officials frequently
responded to other pressures.
11
The media attention given to
Love Canal residents, who
reported high incidents of birth
defects and rates of cancer,
led to the passage of a new
federal law in 1980 regulating
toxic waste disposal. This
photograph shows one of the
endangered children
demonstrating during a
neighborhood meeting.
“LEAN YEARS PRESIDENTS”
FORD AND CARTER
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Gerald Ford succeeded to the presidency following
Richard Nixon’s resignation.
After pardoning Nixon, Ford lost the nation’s trust.
Democrats turned to Georgia Governor Jimmy Carter.
Carter narrowly defeated Ford, building on his moderate
image, his outsider status, and his pledge to restore trust.
Carter by and large supported conservative policies like
deregulation and increased military spending.
Inflation and interest rates soared, leading many to
conclude that Carter could not turn the economy around.
13
The Election of 1976
Incumbent Gerald Ford could
not prevail over the disgrace
brought to the Republican
Party by Richard Nixon. The
lingering pall of the
Watergate scandal,
especially Ford’s pardon of
Nixon, worked to the
advantage of Jimmy Carter,
who campaigned as an
outsider to national politics.
Although Carter and his
running mate Walter Mondale
won by only a narrow margin,
the Democrats gained control
of both the White House and
Congress.
THE NEW URBAN
POLITICS
Lieutenant
Governor
Mervyn
Dymally
and his
family in
California.
Political mobilization during the 1970s
frequently focused on community
issues that cut across ideological
lines.
College students, along with African
Americans and other minorities,
mobilized and won power in
numerous communities.
Several major cities elected black
mayors.
The fiscal crisis of the 1970s
frequently foiled their plans for
reforms.
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Ron Dellums, Oakland
California.
THE LIMITS OF
GLOBAL POWER
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Presidents Ford and
Carter both believed that
American power had
been declining and that
there should be no more
Vietnams.
DETENTE
16
June 18, 1979: U.S. President Jimmy
Carter, left, and General Secretary of the
Communist Party of the Soviet Union Leonid
Brezhnev shake hands while Soviet Foreign
Minister Andrej Gromyko, center, applauds
in the Vienna Imperial Hofburg Palace after
Carter and Brezhnev signed the Strategic
Arms Limitation Talks (SALT) II Treaty.
(U.S. State Department Release)
American diplomats
sought a way to
wind down the cold
war by getting the
Soviets to agree to
respect human
rights and by
negotiating arms
control agreements.
FOREIGN POLICY AND
“MORAL PRINCIPLES”
Jimmy Carter pledged to put
human rights at the center of his
foreign policy.
His greatest success came when
he negotiated the Camp David
Accord between Egypt and Israel,
though the agreement did not
bring stability to the region.
17
Carter reformed the CIA and
returned the Canal Zone to
Panama.
18
President Carter signs the Middle East Peace Treaty with Egyptian President Anwar
Sadat and Israeli Prime Minister Menachem Begin, in Washington, DC, March 1979.
President Carter had invited both leaders to Camp David, the presidential retreat in
Maryland, where for two weeks he mediated between them on territorial rights to the West
Bank and Gaza Strip. Considered Carter’s greatest achievement in foreign policy, the
negotiations, known as the Camp David Peace Accords, resulted in not only the historic
peace treaty but the Nobel Peace Prize for Begin and Sadat.
(MIS)HANDLING THE
UNEXPECTED
Carter received contradictory advice urging him to be both
tough on and conciliatory toward the Soviets.
His Third World efforts received mixed support for both
authoritarian and revolutionary governments.
1970’s
Present
19
He reacted strongly to a Soviet intervention in Afghanistan.
THE IRAN
HOSTAGE CRISIS
Carter’s decision to allow the
deposed shah of Iran to enter the
country for medical treatment
backfired.
Iranian students seized the
American embassy and held its
personnel hostage.
20
He tried diplomacy and at the
same time an ill-fated rescue
operation. Both failed.
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21
Iranians demonstrate outside the
U.S. Embassy in Tehran, raising a
poster with a caricature of
President Carter. The Iran hostage
crisis, which began November 8,
1979, when a mob of Iranians
seized the U.S. embassy in
Tehran, contributed to Carter’s
defeat at the polls the following
year. Fifty-two embassy employees
were held hostage for 444 days.
22
THE NEW RIGHT
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NEOCONSERVATISM
23
A variety of forces
converged to turn
back the great
society and form
the New Right such
as conservative
centers like the
Heritage
Foundation.
THE RELIGIOUS
RIGHT
The New Right promoted its
agenda through
televangelists.
24
Protestant ministers were
determined to roll back
liberalism.
25
Christian televangelists Jim and Tammy Bakker hosted the popular “PTL Club” and
capitalized on their success to build the PTL Network and Heritage USA,” which grew to
become one of the largest and best attended theme parks in the United States. This
photograph, taken in 1986, shows the couple shortly before reports of financial
irregularities and a sex scandal forced Jim Bakker to resign from his PTL ministry. They
divorced in 1992 following Jim Bakker’s conviction on federal charges of fraud and
racketeering.
THE PRO-FAMILY
MOVEMENT
26
The New Right
successfully blocked
ratification of the ERA
and rallied support for
efforts to make abortions
illegal.
THE ELECTION OF
1980
27
As the election of 1980
approached, an
unenthusiastic Democratic
convention endorsed him.
The Republicans nominated
Ronald Reagan, who asked
voters, “Are you better off
now than you were four
years ago?”
Reagan won 50.9 percent of
the vote but an
overwhelming majority in
the electoral college.
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The Election of 1980
Ronald Reagan won a
landslide victory over
incumbent Jimmy Carter,
who managed to carry only
six states and the District of
Columbia. Reagan attracted
millions of traditionally
Democratic voters to the
Republican camp.
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Seeing History
The Presidential
Inauguration of Ronald
Reagan.
30
THE REAGAN
REVOLUTION
THE GREAT
COMMUNICATOR
Ronald Reagan credited
his political success to his
earlier acting career.
31
He interpreted the 1980
election as a popular
mandate for
conservatives.
32
Ronald Reagan, the fortieth president of the United States, was known for his ability to
articulate broad principles of government in a clear fashion. The most popular president since
Dwight Eisenhower, he built a strong coalition of supporters from long-term Republicans,
disillusioned Democrats, and evangelical Protestants.
REAGANOMICS
33
Reaganomics is based on a
supply-side economic theory:
Essentially, a successful
economy depended upon the
proliferation of the rich.
The Economic Recovery Tax Act
of 1981: the largest tax cut in the
nation’s history.
The Omnibus Reconciliation Act
of 1981: a comprehensive
program of federal spending cuts.
While decreasing spending on
domestic programs, Reagan
greatly increased defense budget.
THE ELECTION OF
1984
In the 1984 election, Walter
Mondale won the Democratic
nomination by concentrating
on the traditional Democratic
constituencies.
Reagan countered Mondale’s
criticisms by claiming that the
nation was strong, united,
and prosperous.
34
Reagan won in one of
history’s biggest landslides.
RECESSION, RECOVERY,
FISCAL CRISIS
A recession gripped the economy during the early
1980s.
By the mid-1980s the economy grew and inflation was
under control.
Enormous budget deficits grew to an unprecedented
$2.7 trillion as the U.S. became the world’s leading
debtor.
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35
The fiscal crisis was made worse by scandals in the
securities industry. In 1987, the stock market crashed,
ending the bull market of the 1980s.
SOURCE: Statistical abstract of the United States, in Nash et al., The American People, 5th ed., p. 988.
36
FIGURE 30.4 Federal Budget Deficit and National Debt, 1970-98 Tax cuts
combined with huge increases in defense spending created a sharp increase
in the budget deficit during the Republican administrations.
37
After the Dow Jones reached an all-time high at the end of August, stocks began to slide
and then crashed. On October 19, 1987—“Black Monday”—traders at the New York Stock
Exchange panicked, selling off stocks at such a rate that the market lost almost twentythree percent of its value, marking the end of a five-year bull market. The market soon
bounced back, and by September 1989 the Dow Jones had made up all its losses.
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38
BEST OF TIMES,
WORST OF TIMES
While the 1980s celebrated wealth and
moneymaking, the gap between rich and
poor widened.
Race sharply defined the gap between
rich and poor.
39
A TWO-TIERED
SOCIETY
40
41
42
43
44
45
THE FEMINIZATION
OF POVERTY
Women experienced declining
earning power during this period.
Divorce contributed significantly to
female poverty—new no-fault
divorce laws.
46
A sharp rise in teenage pregnancy
also contributed.
EPIDEMICS: DRUGS,
AIDS, HOMELESSNESS
The 1980s saw new epidemics erupt.
Cocaine and inner-city crack use spiraled,
unleashing a crime wave.
• The Reagan administration declared a war on drugs,
but concentrated its resources on the overseas
supply and did little to control demand at home.
In 1981, doctors identified a puzzling disease
initially found among gay men—AIDS.
47
An epidemic of homelessness grew during the
decade. One-third were mental patients
discharged from psychiatric hospitals.
48
In May 1987, members of the
Lesbian and Gay Community
Services in downtown
Manhattan organized ACT-UP.
Protesting what they perceived
to be the Reagan
administration’s mismanagement
of the AIDs crisis, they used
nonviolent direct action, which
often took the form of dramatic
acts of civil disobedience. ACTUP grew to more than seventy
chapters in the United States
and the world.
49
TOWARD A NEW
WORLD ORDER
THE EVIL EMPIRE
Reagan made anti-communism
the centerpiece of his foreign
policy, calling the Soviet Union
an “evil empire.”
He called for a space-based “Star
Wars” missile defense system
that many saw as an effort to
achieve a first-strike capability.
50
Attempts at meaningful arms
control stalled.
THE REAGAN DOCTRINE
AND CENTRAL AMERICA
The Reagan
Doctrine pursued
anti-communist
activity in Central
America.
51
Reagan
intervened in
Grenada, E1
Salvador, and
waged a covert
war against the
revolutionary
government of
Nicaragua.
THE MIDDLE EAST AND THE
IRAN-CONTRA SCANDAL
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The volatility of the Middle East influenced U. S. foreign policy.
In 1986, news broke of how the United States traded arms to
Iran in return for their assistance in freeing hostages held by
terrorist groups. The money from the arms sales was used to
fund the Contras in Nicaragua.
Oliver North, who ran the enterprise, acknowledged that he
had told a web of lies and destroyed evidence, all in the name
of patriotism.
An investigating commission concluded that Reagan had
allowed a small, unsupervised group to run the operation.
In 1992, outgoing President George Bush, whose involvement
had been the target of much speculation, pardoned several
officials who were scheduled to be tried.
53
The United States in the Middle East in the 1980s The volatile combination of
ancient religious and ethnic rivalries, oil, and emerging Islamic fundamentalism made
peace and stability elusive in the Middle East.
54
Lt. Col. Oliver North,
who once described the
scheme to sell arms to
Iran to help the Contras
as a “neat idea,” is
shown testifying in July
1987 before a joint
Congressional
committee formed to
investigate the IranContra affair.
THE COLLAPSE OF
COMMUNISM
In 1985, Mikhail Gorbachev came to
power in the Soviet Union and
instituted a series of political and
economic reforms.
The Soviet Union dissolved in 1991.
55
This ended the great superpower
rivalry.
56
In August 1961, the border between East and West Berlin was closed, and the Berlin Wall
was built to divide the city into two sections. After twenty-eight years, on November 9, 1989,
the government in East Germany lifted travel restrictions. This photograph shows
demonstrators defiantly tearing down the Berlin Wall, which for three decades had embodied
the political divisions of the cold war.
57
“A KINDER,
GENTLER NATION”
REAGAN’S SUCCESSOR:
GEORGE H. W. BUSH
Bush carried over
several policies from
Reagan’s
administration.
58
Bush described himself
as a “compassionate”
Republican.
THE
PERSIAN
GULF
WAR
59
As the old geopolitical order disappeared, ideological rivalry shifted
to the Middle East.
Iraq seized oil fields in Kuwait and the U.S. responded swiftly.
U.S. air strikes lasted 42 days, the ground war 100 hours and
victory was swift.
The war, however, intensified Muslim hatred of the United States.
THE ECONOMY AND THE
ELECTION OF 1992
The Persian Gulf War swelled
Bush’s popularity, however the
economy soon pushed to drop
his performance rating to just
51 percent.
He faced a formidable
opponent in Bill Clinton.
60
Clinton adopted many
conservative themes and took
43 percent of the popular vote
and carried 32 states.
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