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12. THE WORLD'S SOLE SUPERPOWER

THE REAGAN YEARS (1981-1989)

CONTENTS

Reagan enters the White House

Reagan gets tough

The American economy struggles forward

Major develoments in foreign policy

The Iran-Contra Affair

The textual material on this webpage is drawn directly from my work
        America's Story – A Spiritual Journey © 2021, pages 367-377.
REAGAN ENTERS THE WHITE HOUSE

The 1980 presidential election.  In the upcoming 1980 national elections, the Republicans nominated as the party's presidential candidate the former actor Ronald Reagan – who however also had a long political career – as once head of the actors' guild and then two terms as governor of California (1967-1975).  He had run for the Republican nomination in 1976, taking a tough stance on the Cold War (he was not greatly fond of détente) – but in the end lost out to Ford.  In the 1980 convention he competed against and ultimately defeated veteran Washington insider George Bush for the presidential nomination – but ended up asking him to join him on the Republican ticket as vice president.  He campaigned on the same tough stance – depicting Carter as just another nice guy.

But the sad state of the economy would ultimately be the cause of a sweeping Reagan victory in the November 1980 elections.  Reagan received 50.7% of the popular vote and 489 electoral college votes to Carter's 41% of the popular vote and only 49 electoral college votes, the balance of the popular vote going to third-party candidate John Anderson with 6.7% of the popular vote (but no electoral college votes).

As the last humiliation to Carter, on exactly the day Reagan was being sworn in as the new U.S. president, Iran released the American hostages – and they were on their way home.  True, Carter had worked hard for that release.  But the fact that it came when it did made it appear that it was done possibly out of fear of the new tough president – at least that is how a lot of Americans read the event.

Reagan – the man, and the Christian.   Reagan was born in Illinois in 1911, and raised in several Illinois towns, to an Irish Roman Catholic father, who was a salesman, and a Protestant mother, whose deep religious convictions would have a very strong influence in the way Reagan grew up, and the way he looked at life.  In Dixon, where the Reagans finally settled in, Reagan became strongly influenced by his pastor, Ben Hill Cleaver – who would become like a second father to Reagan – and ultimately also Cleaver's daughter, with whom Reagan became engaged, until she moved to Europe and broke the engagement.  Although this hurt did not undercut his Christian faith, which remained strongly private, it did end his church attendance, for a very long time.

His youth seemed unexceptional, even at Eureka College where he was merely a "C" student.  But his service as a lifeguard (saving numerous lives), swim team captain, and student body president gave indication that he did not intend to stay "average."  And he got that chance to step out in life as a radio sports announcer.  And then, on a trip to California covering a game there, he took and passed a screen test – which then opened the door for him to become a bit-player in numerous B-grade Hollywood movies.  But he moved up in importance, until his role as the lead actor in the Knute Rockne movie (1940) brought him to stardom.

In the meantime, he had entered the Army Reserves (1937) as a second lieutenant, and in early 1942 was activated fully, in the military's Public Relations division, producing everything from military training to war-bond campaign films.  And like so many, his military service introduced him to the world of political affairs.  Thus in 1947 he ran and was elected as the president of the Screen-Actors Guild.

But it was a very troubled time for the movie industry, due to the political controversies aroused by the postwar Red Scare, and Reagan had to tread lightly, although he himself was strongly anti-Communist in his own political standing. Yet here is where his strong Christian background – and his mother's influence – played a key part in his efforts to bring reconciliation rather than condemnation to all this political dynamic.

Unfortunately, such reconciliation did not work with his wife, actress Jane Wyman, and their 9-year marriage ended in 1949 when she divorced him because of all the political dynamics their lives were caught up in.  But he would remarry three years later another actress, Nancy, whom he came to the aid of when she was confused with an actress of the same name, who was identified as a Communist.  And though she would never become quite the Christian that he was, they worked closely together in a very harmonious marriage, one that would be a big support to Reagan as he moved forward in life, increasingly of a conservative political nature.

His known conservatism – and national popularity because of his long hosting of the popular TV show, The General Electric Theater – led him to be a keynote speaker at the 1964 Republican National Convention and Barry Goldwater supporter.  This in turn caused the California Republican committee to ask Reagan to run against Democratic Party Governor Pat Brown in the 1966 gubernatorial election, which Reagan won!

Here his conservatism demonstrated itself in the way he went at the state's finances, and his stand against all the student protests that had rocked the state.  This proved to be exactly how the California majority (at that time, anyway) wanted things.  And he was reelected governor in 1970.

As he approached the end of his second term as governor, he began to look at the idea of running as the Republican candidate for the U.S. presidency itself.  And indeed, in the 1976 race, he became the leading contender against Ford, the latter who however ultimately got the Republican nomination (but lost the presidential race itself to Carter).

That did not seem to slow Reagan up much, and four years later he made another run at this goal, was indeed nominated as presidential candidate by the Republican Party, and ultimately brought to the White House by the American voting public.

As a strongly self-acknowledged Christian (as Carter had also been) Reagan certainly led the nation to wonder where his Christian faith would touch on his political leadership.  He had not been a church-going individual, and seldom spoke of his personal faith.  But he (much like Eisenhower and Nixon before him) spoke very often about the American nation itself and the vital relationship it had long had with God – and the way that this relationship was so important to the nation's development.  And indeed, it would be this sense of America's ties with God that would register itself deeply during his presidency, in numerous ways.

The importance of the Christian religion would even become an important part of his discussions with Gorbachev, in Reagan's efforts to bring Russia out of its Communist camp and into a much freer world – one of peace rather than contention.

REAGAN GETS TOUGH

The American economy remained in horrible shape, thanks to persistent inflation, ruinously high interest rates, and high national unemployment.  Consequently, America's labor groups were in a very restless mood.  But when the members of the Professional Air Traffic Controllers Organization (PATCO) went on strike in August of 1981, Reagan moved strongly against them, claiming that they had no right to shut down America's airports – merely worsening the national economy all the more.  He fired some 11,300 strikers, cut back scheduled flights to about 50 percent of the normal rate, and brought in replacements (including military air traffic controllers) to take over those flights.

America was not used to seeing such presidential power – but greatly approved his actions.  Ultimately this shattered PATCO – and sent a warning to other unions not to mess with the nation's economy.

The Lebanon crisis (1982-1984).  In 1982 Reagan decided to answer an appeal for help by the United Nations in pacifying warring groups – stirred to wrath by Israel's attack on Palestinian refugee camps in Lebanon that June.  Lebanon was tearing itself apart.  Consequently, Reagan sent 800 American troops in August to try to separate the warring parties.  But the fighting only grew worse, especially when Christian Lebanese fighters, allied with Israel, surrounded and then slaughtered men, women and children in those same refugee camps – causing America, France and Italy (the bulk of the UN peacekeeping force) to increase their number of soldiers.  For a while it looked as if the situation was improving.

But the next year the situation had deteriorated again, especially after Syria decided to intervene in the civil strife in Lebanon and invaded the country – merely increasing the level of chaos there.  Then that October a truck-bomb attack on the UN barracks killed 241 American and 58 French soldiers.  Now Reagan had a decision to make – pull out – or dig in even more deeply.  Ultimately he decided to pull out in early 1984.

Actually, Americans were rather impressed by the ability of the president to admit defeat and go home – rather than what was often the case (such as Vietnam) when leaders would only get themselves and the country caught more deeply in a mess – because they could not admit to a mistake.  Americans in fact felt comforted by the knowledge that they had a president of unusual political wisdom operating from the White House.

The U.S. military intervention in Grenada (October 1983).  Partly the decision about Lebanon was shaped by events taking place in the Caribbean – when Marxist revolutionaries overthrew the government of the tiny island Republic of Grenada.  From Reagan's point of view, this was a totally unacceptable development, especially as Grenada was located on the path leading to the entrance of the Panama Canal.  America did not need another opportunity for the Soviets to gain yet another strategic position in the Western hemisphere.  Encouraged by other Caribbean governments – which felt themselves vulnerable to the same kind of action – Reagan sent American troops to Grenada – sparking the angry outcries of the "anti-imperialist" wing of American politics (and the world).  Even the United Nations was quick to protest the American action.  But the American troops moved so quickly (just a few days) to restore the Republic's constitutional government back to power that the American voices of opposition died away quickly.  As for the United Nations, Reagan was tiring of its whining – and simply disregarded it – much to the delight of the majority of Americans.  Clearly Reagan was not one to be pushed around by world public opinion.  Everyone – including the Soviets – took notice.

THE AMERICAN ECONOMY STRUGGLES FORWARD

Supply-side economics.   Reagan had made a big deal of how he intended to fight the stagflation (economic stagnation and accompanying inflation) with his own approach to the economic crisis (popularly termed "Reaganomics").  He was going to pursue the doctrine of supply-side economics – in short, get industry back up and running so that a more abundant supply of goods would begin to bring prices back to normal.

But how he planned to do that with Volcker's interest rates running so high was a huge mystery.  With car loans and mortgages running at such high interest rates, few Americans were willing to purchase either cars or houses.  Likewise, businesses could not contemplate their expansion when interest rates demanded by the financial world remained prohibitive.  How exactly then was Reagan going to get production or "supply" back up and running again?

Actually, two things would have to happen first.  The price of energy would have to come back down to an affordable level.  And so would interest rates.  But those were matters with two very different causes: Arab-dominated OPEC – and America's "economic czar" Federal Reserve chief Paul Volcker – neither of which seemed to be in a very cooperative mood.

Energy prices.  But something was stirring in the energy world.  And it was coming from Russia.  The Soviet economy was slowing down.  Socialism had not brought "workers' paradise" to Russia – and Russian workers were losing interest in the well-being of their economy, with workers' absenteeism rampant at the workplace – as well as alcoholism when they did show up.  Years of focusing the Russian economy on the military had left the country with little to offer its workers.  Russia had no plans to cut back on its military – but needed something extra to provide funding in order to develop something of a private or personal economy.  But the only such asset Russia possessed – one that had serious value on the world market – was oil and gas – which Russia was enormously abundant in.

Russia was not a member of OPEC, but followed OPEC pricing closely.  But now Russia was going to have to break from that group and drop prices for its petroleum products in order to get them to a hungry market ahead of OPEC.  So in 1981 the Soviets lowered their prices. This now put OPEC members in a bind because they would have to do so also – in order not to have all their customers head off to Russia for their oil purchases.  But then OPEC's lowering of its prices forced Russia to have to do another round of price reductions – forcing OPEC to do the same thing.  Now a price war began to bring energy prices down – dramatically so.  Thus the politically designed energy shortage, the primary cause of the global inflation, eventually came to an end – and inflation with it.

Dealing with Volcker.  Now Volcker no longer had the excuse of fighting inflation with his monetarist or tight-money strategy.  Volcker, as the American economy's supposed savior, did not let up gladly – until Congress threatened to reduce the powers of the Federal Reserve if he did not do so.  Thus interest rates finally came down – and the economy finally got up and moving again.<

Social Security.  One of the issues that had troubled the 1970s and was needing a solution heading into the 1980s was the matter of Americans' Social Security funding.  Due to the immense energy-driven inflation that hit during the 1970s, the Cost of Living Allowance (COLA) had to be adjusted to the point that it nearly emptied out the assets of the Social Security Trust Fund.  Thus Social Security taxing was increased from 2% to 6.15% of a worker's earning, helping somewhat.  Also the rate of increase of the COLA was slowed up.

Then in 1983 it was decided to separate the Social Security Fund from the federal government's general revenue, giving it its own dynamic to be worked with (at this point combining its account with the federal general budget account was actually considered a detriment – not a boost –  to the federal budget picture!).

But, provision was made to use now-independent Social Security Funds to "help" the federal government by purchasing the federal government debt – which is supported through the sale of bonds or IOUs to a funding source.  And why not the Social Security Trust Fund?  That money just sits there.  Why not "invest" that money in government bonds?  But critics pointed out that should some serious problem arise with the government debt, the people's Trust Fund could be found to be holding only worthless government IOUs.  Defenders said that this was highly unlikely (conveniently forgetting the numerous times in the past that the federal government came close to financial failure).  Supporters of the deal ultimately won the argument, and thus this indeed became the character of the Trust Fund:  a major creditor to the federal government, holding a massive amount of federal government IOUs, at times fully one-half of the huge federal debt.

Reagan's reelection in 1984.  The Democrats would certainly understand that they were going to have a hard time running against the very popular Reagan – who was due to run for reelection in 1984.  Democrats nominated the former U.S. senator from Minnesota and vice president under Carter, Walter Mondale, as their presidential candidate.  In the end, Reagan scored a huge 58.8% of the popular vote and 525 electoral college votes to Mondale's 40.6%, and only 13 electoral college votes:  the ever-Democratic-Party supporting three votes of Washington D.C.[1] – and those of Mondale's home state of Minnesota.  The outcome was never in doubt.

[1]Ever since Washington, D.C. was given the right to choose its own presidential electors in 1961 (the 23rd Amendment), D.C. has been the strongest Democratic Party supporting constituency in the nation.  This is hardly surprising, as the Democratic Party represents perfectly the idea that the Washington bureaucracy should be running the country.  In fact it is surprising that there are any Republicans at all in this district!  Thus in the most recent national elections, the Democrat Biden received 92.15% of D.C.'s vote, compared to the Republican Trump's 5.4%, a D.C. voting spread identical to that of the 2016 race between Hillary Clinton and Trump.

MAJOR DEVELOPMENTS IN FOREIGN POLICY

Muammar Gaddafi.  With the exception of Egypt – now under Mubarak but continuing to follow Sadat's same pro-West, even pro-American, foreign policy – the Arab world was as eager as ever to develop Arab nationalism.  Israel provided the ever-ready cause behind restless Arab nationalism – with various Arab modernizers such as Muammar Gaddafi of Libya trying to present themselves as the Arab world's best champion.  The flamboyant Gaddafi attempted all sorts of programs (his little Green Book of Gaddafi quotations – similar to Mao's little Red Book), from Arab Socialism and then back to Arab Capitalism (Libya was very wealthy in terms of oil reserves) – sometimes quite Secular, sometimes orthodoxly Muslim (in Gaddafi's own unique way).  When the Arab world turned out not to be terribly responsive to his attempts at Arab leadership, he then became very "African" – attempting to make himself the leading voice in African affairs taking place to the south of Libya.

But he pushed things too far with Reagan when it was discovered that he was connected to the 1986 Berlin bombing of a discotheque in which a number of American soldiers were killed – and Reagan retaliated by sending patrol boats into waters claimed by Libya (considered by the West as high seas and thus nobody's territory) – which naturally were fired on by Libya – and which Reagan answered by attacking Gaddafi's Presidential Palace.  When the United Nations condemned the attacks, Reagan simply ignored the organization – as did a number of other countries which too were tired of Gaddafi's ventures (principally supporting various terrorist organizations such as the Irish Republican Army and various Moro or Islamic jihadist groups operating in the Philippines).  Even the Soviets found themselves backing away from Gaddafi, not wanted to get dragged into an unwanted event.

Anyway, for a while, Gaddafi would be forced to behave – for fear of Reagan's reprisals.

Other militant organizations.  But huge problems in the Middle East were coming from a number of other sources, principally the PLO or its subgroup Fatah, plus Hezbollah and Hamas – primarily dedicated to the crippling or even destruction of Israel.  But each represented a very different part of the world of Islam.  The Palestinian Liberation Organization (PLO) or Fatah had long been the voice of the Palestinians chased out of their homelands by the Jewish migration into Palestine – and was the organization officially sponsored by the Arab League.  Defending both Christian and Muslim Arab interests in Palestine, it tended to be mostly Secular in its promotion of Palestinian rights.  Hezbollah however was a strongly Muslim voice of the Shi'ites – founded and supported by Iran and numerous Shi'ites among the Lebanese and Syrians – which found itself constantly in competition with the Arab Sunnis.  Then Hamas came into being in the later 1980s – upset that the PLO/Fatah was beginning to show a willingness to negotiate a compromise of some kind with the Israelis.  Hamas was also more militantly Muslim (Sunni) – rather than merely Secular in character.

The Rapid Decline of the Soviet Empire:  Afghanistan.  Meanwhile, the Soviets found themselves caught in a quagmire of rising Afghan Muslim and tribal hostility – aroused by the Russian attempt to impose a Communist puppet government in the Afghan capital city, Kabul.  Afghan rebels (mujahedin) even looked to the Reagan government for help in ousting the Russian troops occupying their country – finding Reagan very eager to help out.  Americans sent the mujahedin all varieties of weapons, including missiles that could easily take out Russian tanks and jets.  Consequently, the Soviets found themselves struggling to hang on to any kind of defensive position in the country.  Soon anti-war sentiments began to grow among the Russians – including even members of the Russian military.

The rapid turnover in Soviet leadership (1982-1985).  This all was taking place at a time when the Russians were having a very hard time getting leadership in place – ever since Brezhnev's death in late 1982.  At first a Communist hardliner (supposedly a good match to the equally hardline Reagan) was put in place at the head of the Party in Moscow.  But he died only a year later.  He in turn was replaced by another individual – who was in no better health – and who also died only a year after that.

Pressure from Reagan.   Meanwhile Reagan was pushing and pressuring the Soviets in every way possible.  He sensed the Soviet decline and intended to exploit it.  He threw down the challenge to Russia in a speech before the British Parliament in 1982 when he called the Soviet Union an "Evil Empire" and predicted its collapse in the near future.  Soon thereafter Reagan restored the B1-bomber program that Carter had canceled and armed NATO with Pershing II missiles.  In 1983 he announced plans (the Strategic Defense Initiative or SDI) to develop and deploy missiles capable of defending America from a missile attack from any enemy – which Kennedy termed as "reckless Star Wars schemes."  It was an expensive program – but one which the Soviets – whose economy was stumbling – would be unable to match.   Ultimately, the American people seemed to approve of Reagan's "Star Wars schemes."  Once again, Reagan's toughness drew the approval of the majority of Americans.

But in the end, the program would not be needed.  The Soviet Empire would soon collapse.

Mikhail Gorbachev.  In 1985 the Russians brought to power a younger, more visionary Mikhail Gorbachev – who was looking forward to enacting a number of reforms to liberalize the government and Russian society.  He was also hoping to improve relations with America.

Gorbachev introduced a number of liberalizing reforms – known as glasnost (more personal freedom for the people), perestroika (liberalizing the economic system), and demokratizatsiya (a democratizing of the political system).   These reforms were well received both at home and abroad – and led to a number of very friendly meetings between Reagan and Gorbachev – to see how they could finally end the Cold War.

Reagan's challenge.  At one point, in June of 1987, when Reagan was visiting Berlin, he issued this challenge as he was speaking at the Brandenburg Gate:

... if you truly want peace and liberalization – Mr. Gorbachev, open this gate!  Mr. Gorbachev, tear down this wall!

This did not happen right away – but something like it was underway.  And Reagan knew so – although he would be one year out of office when this challenge finally was answered with the coming down of the Iron Curtain separating East and West Europe.

China continues self-reform under Deng Xiaoping.  While the Soviets were undertaking deep reforms to get their economy up and moving, the Chinese Communists were doing the same thing, except with very different results.  At the same time that the reforms crumbled the Soviet social-economic-political order, in China similar reforms were clearly working to strengthen Chinese society – politically in a moderate fashion and economically in a massive fashion.

Part of this was due to the Chinese entrepreneurial instinct being still alive and well in China – especially along its major Eastern cities such as Shanghai, which earlier in the century had been a hub of Chinese industry.  But part of it was also due to the very favorable trade protection deals with the West that Deng had secured from the Westerners, the latter anxious to see China move closer to their world of capitalism.

Deng also kept important restraints on the dynamic in order to keep it from getting out of control (as things had developed in Russia), largely through the heavy government subsidizing of this new "independent" industrial dynamic.  This heavy government support not only gave huge trading advantages to the Chinese industrialists, it kept them in a very cooperative relationship with the Deng government.  Thus the Chinese economy began to boom, annual growth rates averaging 8-10% during most of the 1980s and 1990s.

THE IRAN-CONTRA AFFAIR

In the meantime a major problem for Reagan exploded at home when in November of 1986 a Lebanese newspaper reported a story about a secret deal to get Iran to intervene to release kidnapped Americans held in the Middle East by Hezbollah – through the sale of various US weapons (via Israel as intermediary) to Iran.  At about the same time (October), a CIA plane was shot down by the Nicaraguan Sandinista (strongly Leftist) government, a plane carrying weapons to anti-government troops known as the Contras.  One American, Eugene Hasenfus, survived the downing, was arrested by the Nicaraguans and immediately tried – at which point he confessed to the secret shipment of arms to the Contras.  Both actions were in violation of very specific legislation (the Bolen Amendment to the Pentagon budget forbidding further help to the Contras) plus the long-standing taboo of paying off kidnappers (even if only indirectly, by way of Iran's intervention), because it merely encouraged more kidnapping.

The two events occurred at around the time of the 1986 Congressional elections in which the Democrats increased their majority in the House and now took control of the Senate as well – with large majorities in both houses (House: 258 to 177 and Senate 55 to 45).

But even before the new Congress could take its seat, the Iran-Contra Affair (as it came to be known) exploded as a major news item – forcing Reagan in mid-November to go before national television to explain his side of the affair.  Two weeks later U.S. Attorney General Edwin Meese admitted that the money from Iran was used to finance the Contra shipments.  On that same day Reagan fired Marine Lt. Col. Oliver North – who confessed to being in charge of the whole matter.  And on that same day Reagan set up a three-man Presidential Commission, headed up by former Texas Senator John Tower, to look into the matter.  In late February of the following year (1987) the Tower Commission delivered its report, outlining the actions of various participants in the whole affair – although it largely excused Reagan as not having much knowledge of the operation.

In March Reagan again went before TV audiences – to apologize for his mishandling of the whole affair – explaining that he was in part trying to help get the release of hostages and in part working with Iranian moderates in trying to improve Iranian-American relations.

But in the meantime (January), the new Democratic Congress set up its own investigative committees – dismissing the Tower Report – obviously looking for more material to bring against the Reagan "imperial presidency."  It was Watergate all over again.  The hearings ran from early May to early August – again watched closely on TV by the Americans – especially when Lt. Col. North was interviewed.  Finally a Joint Committee Report was published in November – with Republican members of the Committee issuing a dissenting Minority Report.  Basically Reagan was criticized for not doing his job in staying on top of such matters.  However, the Report came up with nothing specific that Congress could charge Reagan with.  But even then, that would not be the end of the matter – as further investigations were conducted by a Democrat-controlled Congress all the way into 1991.

At the time, Reagan's popularity dropped dramatically from a two-thirds approval rating to less than half.  Yet his approval ratings would soon climb again to pre-Iran-Contra levels as he finished out his presidential term – due to his obvious success with Gorbachev in lowering the tensions of the Cold War.



Go on to the next section:  The One-Term Presidency of George H.W. Bush

  Miles H. Hodges