Rise of Conservatism

Reagan and Bush, Sr. 1980-1992

Reaganomics Problems in the Middle East
Proponent of free-market capitalism similar 1978 Camp David Accords
to “laissez-faire” approach before the Great 1979 Shah of Iran is deposed, Ayatollah
Depression Khomeini established an Islamic dictatorship
Cut taxes Soviet Union invaded Afghanistan: war lasts
Deregulate businesses until 1989: America backs Mujahideen of
Raise military spending which Osama Bin Laden was a part
Cut social safety net programs (Social 52 Americans were taken hostage when
Security, Medicare, Medicaid) Iranian protesters stormed the American
“Supply-Side” Economics Embassy in Tehran: They were released on
“Trickle-down” Economics: These terms the day of Reagan’s inauguration in 1981
suggested that if you allow businesses to 1980-88 Iraq-Iran War: U.S. backs Iraqi
keep more of their money by drastically dictator Saddam Hussein
cutting taxes, they will create more products 1981 President Anwar Sadat of Egypt, one of
and more jobs which will benefit everyone. the signers of the Camp David Accords is
First 2 years of Reagan’s first term (81-82) assassinated
saw a deep recession as the Federal Reserve 1983 American Marines are killed in Lebanon
raised interest rates to combat inflation. By by a suicide bomber as part of the Israeli-
1983, the economy began recovering which Palestinian conflict
lent some credence to Reagan’s economic 1986 U.S. bombs military targets in Libya
policies. First round of tax cuts lowered the because President Reagan blamed Libyan
highest marginal tax rate from 70% to 50%. leader Muhammar Gaddafi for a bombing of
nd
The second round, passed during his 2 term a disco in West Berlin which killed several
dropped the rate to 28%. Americans
Has not worked out as intended. Rich got 1987 The First Intifada, Palestinian uprising,
much richer, middle class stagnated then to protest Israeli occupation begins
shrunk, and poor got poorer. 1990 Iraq invaded and occupied Kuwait
Increased military spending to put pressure 1991 U.S. coalition begins bombing of Iraq on
on the Soviets coupled with these massive Super Bowl Sunday
tax cuts tripled the national debt over General “Stormin” Norman Schwarzkopf led
Reagan’s 8 years. Operation Desert Storm which forced Iraq to
Deregulation led to severe crisis in the evacuate Kuwait in 100 hours of ground
Savings and Loan industry and caused the fighting
Dow Jones to plunge by 508 points in 1 day,
the largest ever up to that point.
Reagan’s VP, George H.W. Bush ran on
Reagan’s record, saying “read my lips, no new
taxes” and keeping up massive military
spending. As deficits grew and a recession
developed, Bush had to renege on his
promise and it cost him the 1992 Presidential
Election.
 Problems in Latin America Problems with the Communist World
1979 President Carter signs a treaty ceding 1981 President Reagan enters office taking a
control of the Panama Canal to Panama hard line against the Soviet Union
beginning in 2000 U.S. imposed sanctions on Poland and the
Sandinista Rebels took control of Nicaragua U.S.S.R. for their declaration of martial law to
and established a Socialist regime combat the “Solidarity” movement started by
1980-90 El Salvadorian Civil War: U.S. spends Lech Walesa
$Billions to keep Soviet-backed insurgents 1982-85 Worsening relations with the Soviet
from overthrowing the government Union as their leadership changes hands
1983 U.S. and a Caribbean coalition invade several times due to death
the tiny island of Grenada. President Reagan 1983 Korean Airliner with Americans aboard
justifies the U.S. role in the invasion as a is shot down over Soviet air space
mission to secure the safety of 600 U.S. President Reagan introduced the Strategic
citizens in Medical School on the island who Defense Initiative (known as “Star Wars”)
were in danger due to political turmoil President Reagan makes “Evil Empire” speech
1985-87 Iran-Contra Scandal: High ranking about the Soviet Union
government and military officials diverted 1984 Soviets boycott Summer Olympics in Los
funds from selling arms to Iran (we were Angeles (U.S. had boycotted Moscow
supporting Iraq in their war) to fund the Olympics in 1980)
Contras in Nicaragua who were fighting 1985 Mikhail Gorbachev rises to power in the
against the Socialist Sandinista government Soviet Union and introduces “Glasnost”
1986 U.S. supported the overthrow of Haitian which opened up free speech rights and
President Francois “Baby Doc” Duvalier political liberties for Soviet citizens and
1989 Military coup to overthrow U.S. backed “Perestroika” which restructured the Soviet
President Cerezo in Guatemala failed economy and introduced some free-market
U.S. forces invade Panama and depose (capitalist) principles
military leader General Manuel Noriega, a 1st Reagan/Gorbachev Summit
know international drug trafficker 1986 2nd Reagan/Gorbachev Summit breaks
down due to “Star Wars” policy of the U.S.
1987 3rd Reagan/Gorbachev Summit leads to
INF Treaty
President Reagan delivers his “tear down this
wall” speech in Berlin
1988 4th Reagan/Gorbachev Summit sets the
stage for future Soviet/American relations
1989 Solidarity Party comes to power in
Poland
Czechoslovakia overthrows Communist
government
Berlin Wall starts to be torn down
Romanian Communist government is
overthrown
Chinese troops attack student protesters in
Tiananmen Square in Beijing
1990 East and West Germany are reunited as
one nation
Lithuania, Latvia, and Estonia, the Baltic
States, separate from the Soviet Union
Hungary elects non-Communist government
Bulgaria elects non-Communist government
1991 Soviet Union dissolves
Yugoslavia disintegrates and leads to civil war
in Bosnia-Herzegovina
1992 Albania elects non-Communist
government
Concerns over control of Soviet nuclear
arsenal arose: Russia became the nation that
would negotiate nuclear arms treaties with
the United States
1993 Presidents Bush and Yeltsin sign START II
promising to reduce long-range nuclear
weapons by 2/3 with 10 years