Part II new federalism

S hifts in the structure of American society, begun years earlier, had become apparent by the 1980s. The composition of the population and the most important jobs and skills in American society had undergone major changes. The dominance of service jobs in the economy became undeniable. By the mid 1980s three-fourths of all employees worked in the service sector as retail clerks, office workers, teachers, physicians, government employees, lawyers, legal and financial specialists. Service sector activity benefited from the availability and increased use of the computer. This was the information age, with hardware and software processing huge amounts of data about economic and social trends. Meanwhile, American “smokestack” industries, such as steel and textiles, were in decline. The US automobile industry reeled under competition from Japanese carmakers such as Toyota, Honda, and Nissan, many of which opened their own factories in the United States. By 1980 Japanese automobile manufacturers controlled a quarter of the American market.

Population patterns shifted as well. After the end of the postwar “baby boom”, which lasted from 1946 to 1964, the overall rate of population growth declined and the population grew older. Household composition also changed. In 1980 the percentage of family households dropped, a quarter of all groups were now classified as “nonfamily households”, in which two or more unrelated persons lived together.

New immigrants changed the character of American society in other ways. In 1965 the character of American immigration policy changed, and the number of immigrants from Asia and Latin America increased dramatically. Vietnamese refugees poured into the US after the war. In 1980 808,000 immigrants arrived, the highest number in 60 years, as the country once more became a heaven for people from around the world.

In the presidential race of 1980 American voters rejected Carter’s bid for a second term, and elected Ronald Reagan, a conservative Republican and former governor of California. By giving Ronald Reagan an overwhelming election victory, the American public expressed a desire for change in the style and substance of the nation’s leadership. He benefited from the accumulated frustrations of more than a decade of domestic and international disappointments. The 69-year-old Republican became the nation's 40th, and oldest, President.

He had reached the presidency by an unusual route. Born in a small town in Illinois, he spent most of his career in entertainment business – first as a radio sportscaster, then as a successful film actor, and later as a television show host and corporate spokesman for General Electric. In that last capacity he began to speak widely on political issues. In 1964 Reagan appeared on national television to deliver an eloquent endorsement of Barry Goldwater (Senator from Arizona and Republican nominee for president); his speech established him almost overnight as the new leader of American conservatives. Two years later Reagan won governorship of California and served two four-year terms.

Reagan seemed to be a man fully in tune with his times. Throughout his presidency he demonstrated the ability to instill in Americans pride in their country, and a sense of optimism about the future. He assumed the presidency promising a change in government more fundamental than any since the New Deal of 50 years before. Reagan succeeded brilliantly in making his own engaging personality the central fact of American politics in the 1980s. Even people who disagreed with his policies found themselves drawn to his attractive image. Known as the “Great Communicator”, Reagan was a master of television and a gifted public speaker.

If there was a central theme to Reagan’s national agenda, it was his belief that the federal government had become too big. He believed that government intruded too deeply into American life. He also wanted his New Federalism to go into effect. First proposed by President Nixon, the plan was to cut the federal government's role in the economy by turning over many of its tasks to state and local governments. By strengthening state governments, he hoped to reduce federal spending and build up national defense.

Reagan’s domestic program was rooted in his belief that the nation would prosper if the power of private economic sector was unleashed. Reagan was a proponent of Supply-side economics, a theory which advocates large tax cuts in order to increase private investments and thus increase the nation’s supply of goods and services. Calling upon Americans to "begin an era of national renewal" in his inaugural address, President Reagan outlined his economic program as "a new beginning." In the weeks that followed he urged Congress to support this program. It called for decreases in taxes, reduced federal regulations, and sharp cuts in federal spending – all designed to stimulate the economy and to curb "double-digit" inflation. Democratic leaders strongly opposed Reagan's economic program. They called it Reaganomics ─ policy designed to increase production or favor supply. They pointed out that less money would be taken in by the federal treasury because of the tax cuts, and complained that most of the budget cuts would have to be made in social programs since Reagan proposed to increase spending on national defense. The Reagan administration, supported by conservative members in Congress, sought to make cuts in the amount of federal money being spent for public health, education, and welfare.

Despite the severe cuts in the federal budget, the Reagan administration was unable to achieve all of the results it sought. By the early 1982 the Reagan economic program was beset with difficulties. The nation continued to face rising unemployment, high interest rates, serious economic recession, and record budget deficits. The US entered the most severe recession since the Great Depression of the 1930s.

However, the economy recovered more rapidly and impressively than almost anyone had expected. Despite a growing federal budget deficit and the prediction of many economists that the recovery was weak, the economy continued to flourish through 1984 and 1985. The US entered into one of the longest periods of sustained economic growth since World War II. Presiding, like Eisenhower, over a period of relative peace and prosperity, President Reagan and his Vice President George Bush overwhelmingly won reelection of 1984.

In foreign policy, Reagan encountered a combination of triumphs and difficulties. Determined to restore American pride and prestige in the world, he attacked what he claimed as the weakness and “defeatism” of previous administrations which had allowed Vietnam, Watergate, and other crises to paralyze their will to act. The United States, he argued, should again become active and assertive in opposing communism throughout the world. The most conspicuous examples of the new activism came in Latin America. In El Salvador, where the regime was engaged in struggle with communist revolutionaries, the president committed himself to increased military and economic assistance. In neighboring Nicaragua, a pro-American dictatorship had fallen to the revolutionary “Sandinistas” in 1970. The new government had grown increasingly anti-American throughout the early 1980s. Despite substantial domestic opposition, the US administration gave more and more support, both rhetorical and material, to the “contras” – a guerrilla movement recruited and trained largely by the American CIA, drawn from several antigovernment groups and fighting to topple the Sandinista regime.

The administration's greatest foreign policy success, Reagan believed, came in October 1983, when American soldiers and marines invaded the tiny Caribbean island of Grenada to safeguard American lives and to oust an anti-American Marxist regime that took power after the assassination of the country’s elected prime-minister. The invasion was brief, successful, and not particularly costly. It was highly popular with the American public.

In June 1982, the Israeli army launched an invasion of Lebanon in an effort to drive guerrillas of the Palestinian Liberation Organization from the country. The United States supported the Israelis rhetorically, but it also worked to reduce the violence and to permit the PLO forces to depart Lebanon peacefully. An American peacekeeping force entered Beirut to supervise the evacuation. Later, American marines remained in the city, apparently to protect the fragile Lebanese government. But military efforts in Lebanon ended tragically when over 200 Marines were killed in a terrorist bombing in October, 1983. In the face of this difficult situation, Reagan chose to withdraw American forces rather than become more deeply involved in the Lebanese struggle. For a time the administration showed similar restraint in response to a series of terrorist incidents directed against American citizens in Europe and the Middle East. The president made bellicose remarks about several Arab leaders but took no visible action against them. In spring of 1986, however, the administration ordered American naval forces to stage exercises in the Mediterranean, off the cost of Libya (whose radical leader, Muammar Qaddafi, was generally believed to be a principal sponsor of terrorism). Qaddafi claimed the American ships were operating in his territorial waters, a claim the United States denied. In the course of the exercises, Libyan forces harassed the Americans; US bombers then launched a series of retaliatory attacks on Libyan military positions.

Several weeks later, after additional terrorist attacks on Americans and others in which Qaddafi had evidently been involved, American planes staged an extensive bombing raid on the Libyan capital. Several important military targets were destroyed. But the raid also damaged some nonmilitary sites and killed a number of civilians. The bombing was highly popular with the American people, but it evoked strong denunciations throughout the Arab Middle East and from many of America's allies in Europe. Additionally, the United States and other Western European nations kept the vital Persian Gulf oil-shipping lanes open during the Iran-Iraq conflict, by escorting tankers through the war zone.

Relations with the Soviet Union during the Reagan years fluctuated between political confrontation and far-reaching arms control agreements. The president spoke harshly of the Soviet regime, accusing it of sponsoring world terrorism and declaring that any armaments negotiations must be linked to negotiations about Soviet behavior in other areas. The Soviet Union, he once claimed, was the "focus of evil in the world." Relations with the USSR deteriorated further after the government of Poland (under strong pressure from Moscow) imposed martial law on the country in the winter of 1981 to crush a growing challenge from an independent labor organization, Solidarity. Another event that increased US-Soviet tension was the destruction of an off-course Korean passenger airliner by a Soviet jet fighter on September 1, 1983.

The Reagan years in the White House saw unprecedented military spending. The President called for a massive defense buildup, including the placement of intermediate-range nuclear missiles to match and exceed the Soviet arsenal. He also proposed the most ambitious new military program in many years: the so-called Strategic Defense Initiative (SDI), widely known as "Star Wars" (after a popular movie of that name). Reagan claimed that SDI, through the use of lasers and satellites, could provide an impenetrable shield against incoming missiles and thus make nuclear war obsolete – a claim that produced considerable skepticism in the scientific community.

However, Reagan soon found himself contending for the world's attention with Mikhail Gorbachev, installed as chairman of the Soviet Communist party in March 1985. Gorbachev was personable, energetic, imaginative, and committed to radical reforms in the Soviet Union. He announced two policies with sweeping, even revolutionary, implications - Glasnost and Perestroika. Both Glasnost and Perestroika required that the Soviet Union shrink the size of its enormous military machine and redirect its energies to the civilian economy. That requirement, in turn, necessitated an end to the Cold War. Gorbachev accordingly made warm overtures to the West, including an announcement in April 1985 that the Soviet Union would cease to deploy intermediate-range nuclear forces (INF) targeted on Western Europe, pending an agreement on their complete elimination. He pushed this goal when he met with Ronald Reagan at their first of four summit meetings, in Geneva in November 1985. The two leaders met again in October 1986, this time in Reykjavik, Iceland, but they could reach no agreement on arms reduction because of basic differences over SDI. But at a third summit, in Washington, D.C, in December 1987, Reagan and Gorbachev at last signed the INF treaty, banning all intermediate-range nuclear missiles from Europe. This was a result long sought by both sides; it marked a victory for American policy, for Gorbachev's reform program, and for the peoples of Europe and indeed all the world, who now had at least one less nuclear weapon system to worry about.

In June 1987, Reagan called for the removal of the Berlin Wall, appealing directly to Mikhail Gorbachev to remove the physical and symbolic barrier between the two Germanys and the Eastern and Western blocs of Europe. In the year Reagan left office, the Berlin Wall was demolished, followed by the unraveling of the Soviet Union itself.

Two foreign-policy problems seemed insoluble to Reagan: the continuing captivity of a number of American hostages, seized by Muslim extremist groups in Lebanon; and the continuing grip on power of the left-wing Sandinista government in Nicaragua. The most serious issue confronting the Reagan’s administration at that time was the revelation that the US had secretly sold arms to Iran in an attempt to win freedom for American hostages held in Lebanon (Irangate), and to finance the Nicaraguan contras during a period when Congress had prohibited such aid.

The Iran-contra affair cast a dark shadow over the Reagan record in foreign policy, tending to obscure the president's real achievement in establishing a new relationship with the Soviets. Out of the several Iran-contra investigations a picture emerged of Reagan as a lazy, perhaps even senile, president who napped through meetings and paid little or no attention to the details of policy. Reagan's critics pounced on this portrait as proof that the former-movie-star-turned-politician was a mental lightweight who had merely acted his way through the role of the presidency without really understanding the script. But despite these damaging revelations, Reagan remained among the most popular and beloved presidents in modern American history.

DISCUSSION

1. What were the major shifts in American society and economy in the 1980s?

2. Did American immigration policy change at that period? How did it affect the population structure of the country?

3. Who became the 40^th US President?

4. Speak about Reagan’s career.

5. Speak about Reagan’s personality.

6. What was the central theme to Reagan’s national agenda?

7. What is Supply-side economics?

8. Did Reagan administration manage to achieve all the economic results it sought?

9. Speak about the US involvement in El Salvador, Nicaragua, and Grenada.

10. Why did American troops enter Beirut in 1982?

11. Speak about Muammar Qaddafi and the conflict with Libya.

12. Speak about Reagan’s attitude towards the Soviet Union. What incidents deteriorated American-Soviet relations in the early 1980s?

13. What is SDI?

14. How did the relations with the Soviet Union change after 1985?

15. Speak about the Iran-contra affair.