college on campus: american history chapter 30

7/23/2019 College on Campus: American History Chapter 30

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Con ser va t i ve

A scendanc y

C hap ter 30: 1 9

74 - 1 9 9 1



Ronald Reagan as a broad caster He was the governor of California



Reaganomics caused thegreatest recession until

19(*s in 19!1+19!%. ,etafter downsi-ing theirworforces shifted#roduction overseas andtoo advantage of newtechnologies such assatellite communication.The rate of inflation 1(./#ercent at the beginning of

19!1 declined to (./ in19!! #artly because a#eriod of e$#anded oil#roduction



ECONOMY BEFORE REAGAN

•Three worsening recessions starting in1969 were about to culminate in theworst of all in 1981-1982.•Unemployment soaring into double

digits at a pea of 1!.8".

•#oaring double-digit inflation$ with the%&' at 11.(" in 19)9 and 1(.*" in198! +2*" in two years,.•ouble digit interest rates$ with theprime rate peaing at 21.*" in 198!.•The poerty rate started increasing in19)8$ eentually climbing by (("$ from

11./" to 1*.2".•0 fall in real median family incomethat began in 19)8 snowballed to adecline of almost 1!" by 1982.•rom 1968 to 1982$ the ow onesindustrial aerage lost )!" of its real

alue$ reflecting an oerall collapse ofstocs.



REAGAN’S ECONOMIC SUCCESS

•2! million new 3obs were created.•Unemployment fell to *.(" by 1989.•The top income ta4 rate was cut from )!" to 28".•The #eagan #ecoery too off once the ta4 rate cuts were fully

phased in.•Total federal spending declined to 21.2" of 5& in 1989 +een with

the #eagan defense buildup$ which won the %old ar.,•7liminated price controls on oil and natural gas. &roduction soared$

and aided by a strong dollar the price of oil declined by more than*!".•#eal per-capita disposable income increased by 18" from 1982 to1989 +meaning the 0merican standard of liing increased by almost2!" in 3ust ) years.,•The poerty rate declined eery year from 198/ to 1989$ droppingby one-si4th from its pea.

•The stoc maret more than tripled in alue from 198! to 199! +alarger increase than in any preious decade.,•The #eagan recoery started in official records in oember 1982$and lasted 92 months without a recession until uly 199! +when theta4 increases of the 199! budget deal illed it.,•uring this )-year recoery$ the economy grew by almost one-third+euialent of adding the entire economy of est 5ermany to the U.:.economy



0 19!1 Reagan #ersuaded Congress to reduce the to# ta$rate from 2 to /2 and to inde$ ta$ bracets to taeinflation into account. &ive years later' the Ta$ Reform Act

reduced the rate on the wealthiest Americans to %!2.These measures mared a chart retreat from the #rinci#lesof #rogressively 3 the idea that the wealthiest Americansshould contribute much more). This led to su##ly+side

economics.



The Reagan Revolution

4 The Problem of ne!"ality

4 The #econd $ilded A%e



htt#566www.youtube.com6watch7

v8::im-Ty1;



htt#566www.youtube.com6watch7v8y<b10Ayy=



The Over e$tended>ociety6 A troubled

economy



The Rising Tide ofConservatism

4 The Ta& 'evolt

4 The (lection of 19)0




4 'ea%an and American *reedomhttp:++,,,yo"t"becom+,atch.v/h42p*P3a,



>tagflation5 ?y the mid+19 the unem#loyment rate had reached nearly92 its highest level since the @reat e#ression and it remained close to2 for most of the rest of the decade. 0nflation meanwhile reacheddouble digits rising to 1(./2 by 19!



>tagflation ;$#lainedhtt#566www.youtube.com6watch7v8bT-Bt$D;,



\



A&E+C0O leader com#lained that the nited >tateswas becoming "a nation of hamburger stands . .

.A&E+C0O lost (2 of its membershi# with out ofcountry contracts.



Forers trying to deal with crowds of customers at theo#ening of the first Gconald*s restaurant in ?eiing in 199%.



?etween 19/( and 19( median family income had double. ?utbeginning 19( real wages essentially did not rise for twenty years.The 19*s was one of only two decades in the twentieth century3 the other 19() that ended with Americans on average #oorer thawhen it began. "The RiverI "0s a dream a lie if it don*t come true6or iit something worse.



Title J005 African American women made some gains . Through Title J00of the Civil Rights Act which outlawed wor#lace discrimination by se$ orrace and establishment of the ;<ual ;m#loyment O##ortunityCommission to enforce it' they managed t clime the lower levels of the

ob adder. ?y 19!' northern blac women*s median earnings wereabout 9/2 of white women*s earning.



K;A: Kerformance5 The studies of Columbia niversityshowed that #olitical cartoons have a #sychological

influence none other. They will tell the story were wordscannot go. 0m#rovement of the mind must im#rove to otherworld which the mind usually does not go. Hitler hatedcartoonist because of their #ower



>unbelt6RustbeltCommunities



G h f th > b lt* th d d d h tl f f d l f d Th



Guch of the >unbelt*s growth de#ended on a huge outlay of federal funds. Thenumber of residents over D/ increased by (2 during the 19s reaching %Dmillion by the time Kresident Reagan too office. Armed with retirement #acagesmigrations increased new communities in &lorida' Ari-ona and southern California.

Ko#ulation 0ncrease



?y the mid+199*s the steel industry em#loyed only 1'#ersons down from D' in 19(. Only 112 of worers withnon+government obs were union members



The

;ndangered;nvironment



0n Eove Canal near ?uffalo' ew ,or' following the discovery of high rates of cancer'miscarriages and birth defects in the community there was an out rage. There wereto$ic wastes dum#ed by the Hooer Chemical Eaboratory had oo-ed into basement andbac yard' and homemaer Eois @ibbs organi-er a cam#aign of national attention.



0n 19! after a

health emergencywas declared' thestate of ew ,orbrought #ro#ertiesand fenced off the#ublic schools an

move theresidents to newHomes.



?y the time Carter too office more than % nuclear #lantswere o#erating or on order. ?ut in 199 the industrysuffered a near fatal blow when an accident at the ThreeGile 0sland blow in Kennsylvania #lace a strong failure ofconfidence with nuclear #ower #lants



To# official such as @eorgeGeany' #resident of A&E+

C0O denounced "treehuggersI environmentalistsas enemies of economicgrowth' and nited Auto

Forers lobbyist oinedautomaers resistingcom#ulsory gas mileage'right before OK;C raises#rices of gas.



0n 19! the ;KA3;nvironmental

Krotection Agency)established in 19grew to become the

federal governmentslargest regulatoryagency' em#loyingmore than 1'

#eo#le by the end ofthe decade.



The ;KA 3;nvironmental Krotection Agency) was the federallargest regulatory agency em#loying more than 1'

#eo#le.



Eean

,ears &ord

and Carter



Re#ublican Jice #resident elson Rocefeller and Kresident @erald &orddid not get along. Rocefeller' maret driven man would not wear &ord*sbutton F0 which was win inflation now. He did not want to hold bac#ersona consum#tion.



Ford presidential museum



Kresident @erald &ord5 Fhi# 0nflation owhtt#566www.youtube.com6watch7v8LEw!<snHc,

The End of the Golden



Age

4 *ord as President

4 The Carter Administration

4 Carter and the (conomic Crisishtt#566www.youtube.com6watch7v8#y/EKH;MB



Carter had control of



the emocraticKresidency and also

the house and the>enate. Carter*s#roblems where moreeconomic than #olitical.

Carter ran for #residentas an "outsider mainga virtue of the fact thathe never held federaloffice. A devout "?orn

Again ?a#tistI hisintegrity was never<uestioned.



One of Carters biggestsuccess was the deregulationof the air industry. Fith hisresults he was able to increasesales and decrease #rices ofair fare.



Fith high inflation interest rate rose' driving mortgages out of reach for manywould be home buyers Rents in many locations doubled sale of many small



would be home buyers. Rents in many locations doubled' sale of many smallbusinesses went under. Tuition syrocet along with unem#loyment and youngmen and women could neither afford to go to college not find a ob moved bac

home.



The Eimits of

@lobalKower



Carter transferred the authority of the Kanama Canalto the local #eo#le in Kanama by the year %.

Limmy Carter on the Kanama Canalhtt#566www.youtube.com6watch7v8rK-M9HFC



Carter at first signed the>AET % arms reductiontreaty then withdrew hisagreement with RussiaNsinvasion of Afghanistan



Kresident Carter' ;gy#tian #resident Anwar >adat and0srael #rime minister Genachem ?egin celebrating thesigning of the 199 #eace treaty between 0srael and ;gy#t.



Eeft wing >andinistamovement overthrew

icaraguan dictator Anasatasi >om-a 3ally to>A) Gilitary Aid sto##edto icaragua when nunsmurdered



0ran

Hostage

Crisis



;arly in 199 a #o#ular revolution ins#ired by the e$iled

Guslim cleric Ayatollah :homeini overthrew the shah anddeclared 0ran an 0slamic Re#ublic. >hah of 0ran soughtmedical treatment and was taen to Cleveland. 0ranfollowers of :homeini is irate and taes >A ;mbassy

&or ecades the nited



>tate foreign #olicy in theGiddle ;ast had de#endedon a friendly government in0ran. After the C0A hadhel#ed to overthrow thereformist government' thenited >tates C0A installedthe Kahlavi Royal family

and the >hah of 0ran in19/(. Gillions of nited>tates dollars had #ouredinto the 0ranian economyand the >hah*s armedforces. Kresident Carter

toasted the shah for hisgreat leadershi#.



Fhen Carter in ovember 199 allowed the de#osedshah to see medical treatment in the nited >tates:homeini*s followers invaded the American ;mbassy in

Tehran and sei-ed /( hostages. 0ran dislie >A forhel#ing their removed leader.



The Ayatollah :homeini over the the shah. The shah had been a crueltotalitarian leader even though he hel# the nited >tates. The Ayatollah



:homeini too the nited >tates ;mbassy 3/! #eo#le) as hostages for day



g

4 The ran-Contra Aair



The ewRight



eo

Conservative

The heart of the neo+conservatism was however' foreign #olicy. Angered over thefailure to #ursue victory in Jietnam' neoconservatives called for a stronger nationdefense against Jietnam They o##osed detents an accuse the #resident of



defense against Jietnam. They o##osed detents an accuse the #resident ofallowing Communism to advance. They wanted invasion to free Afghanistan.



The Heritage &oundation is an American conservative thin tan based in Fashington' .C.HeritageNs stated mission is to formulate and #romote conservative #ublic #olicies based on the#rinci#les of free enter#rise' limited government' individual freedom' traditional American values'and a strong national defense.P%Q

The foundation too a leading role in the conservative movement during the #residency ofRonald Reagan' whose #olicies drew significantly from HeritageNs #olicy study Gandate forEeadershi#.P(Q Heritage has since continued to have a significant influence in .>. #ublic #olicymaing' and is considered to be one of the most influential conservative research organi-ations

in the nited >tates



The Rise of Conservatismhtt#566www.youtube.com6watch7v8OCr$19HA!



Fith the face of ?ull Connor and @eorge Fallace forconservatives. There became a new movement"eoconservativesI a grou# of intellectuals who charged that the

19D*s had #roduced a decline in moral standard and res#ect forauthority. Once su##orters of liberalism' they had come tobelieve that even well intentioned government social #rogramsdid more harm that good.



Religious

Right

Tom 5olfe 67e ecade8



The Goral Gaority claimed ( millionmember advocated tough laws'against homose$uality' #ornogra#hy



g y' # g # yand #romoted a reduction ofgovernment service es#ecial welfare#ayment of single mothers. GoralGaority was against integration andbusing of school children

0n 199 Lerry &alwell' aJirginia minister created



Jirginia minister createdthe self+styled GoralGaority devoted towaging a war against sinand electing #ro+life #ro+family' #ro+AmericanI.

&alwell has s#ecial #lansfor the great free countryof ours.

Lerry &alwell Kreachinghtt#566www.youtube.com6watch7v8=?bc@0rgOds



A shift of #o#ulation andeconomic resources toconservative strongholds on



conservative strongholds onthe sunbelt of the southlandwest. There is a growth of51)Activists%)Conservative Christianity



Lerry &alwell was fined D' for misusing contributions of the Church.

Tom 5olfe 67e ecade8



4 The 'eli%io"s 'i%hthttp:++,,,yo"t"becom+,atch.

v/Cr&19A)



The Kro+

&amilyGovement



Khyllis >chlaflyEawyer



Eawyer Khyllis GcAl#in >tewart >chlafly is an American

constitutional lawyer' conservative activist'author' and founder of the ;agle&orum. Fii#edia

Born: August 1/' 19% 3age !!)' >t.EouisSpouse: Lohn >chlaflyChildren: Andrew >chlaflyEducation: Fashington niversity in >t.Eouis' Radcliffe College' HarvardniversityMovies: The &irst ?last of the Trum#et

Against the Gonstrous Regiment ofFomen



Khyllis >chlafly a self+described suburban housewife and#o#ular lecturer headed the >TOK+;RA cam#aign'describing the amendment su##orts as a "bunch of bitterwomen see a constitutional cure for their #ersonal

#roblems.



The ;RA bill died in Congress in 19!% with!/2 of the emocrats and only (2 of the



Re#ublicans voting in its favor.



4 The 'eli%io"s 'i%hthttp:++,,,yo"t"becom+,atch.

v/Cr&19A)



19!

;lection



The United States presidential election of 1980 was the 9th <uadrennial #residentialelection. 0t was held on Tuesday' ovember ' 19!. The contest was between incumbentemocratic Kresident Limmy Carter and his Re#ublican o##onent' former California @overnorRonald Reagan' as well as Re#ublican Congressman Lohn ?. Anderson' who ran as aninde#endent. Reagan' aided by the 0ran hostage crisis and a worsening economy at home

mared by high unem#loyment and inflation' won the election in a landslide' receiving thehighest number of electoral votes ever won by a non+incumbent #residential candidate.Carter' after defeating ;dward G. :ennedy for the emocratic nomination' attaced Reaganas a dangerous right+wing radical. &or his #art' Reagan #ledged to u#lift the #essimistic moodof the nation' and won a decisive victoryS in the simultaneous Congressional elections'Re#ublicans won control of the nited >tates >enate for the first time in %! years. Thiselection mared the beginning of what is called by some the Reagan RevolutionP%Q or

Reagan ;ra' and signified a conservative realignment in national #olitics



The Reagan

Revolution



Reagan wasan actor and#layed theotre ameHero @eorge@i##.



After #laying a leading role in ?arry @oldwater*s 19D #residential cam#aign and

with the financial bacing of some wealthy conservatives Reagan won the 19DDrace for California governor securing %2 of Orange County vote. Reagan cutta$es in California and with it achieved a healthy economy



Reaganomics




4 'ea%anonomics4 'ea%an and ;abor



Reagan broe with the traditional style of government control with :eynesian whichwas #art o the ew eal and @reat >ociety. Reagan went to the conce#ts ofsu##ly+side economics or maret driven economics of &rederic Haye and Gilton&riedman*s Austrian or Chicago ;conomics. Eet government more maret.Fhatever revenues were lost in lower ta$ rates would be offset by revenue fromne economic gro th At the same time s#ending c ts o ld ee# the federal



new economic growth. At the same time s#ending cuts would ee# the federal

deficit under control and there by ee# rates down.

Lohn Gaynard :eynes 3government) versus Gilton &riedman 3maret)



1)@overnment formula control 1) Garet Control

%)Ta$es6Tariffs6Regulation %) &ollow the rules of free tradeShonesty();<uity () ;<ual o##ortunity6variance in wealth)Ginimi-e #overty ) Create innovation6invention6motivate/)Hamilton'American >ystem'Clay /) >t. Thomas A<uinas' Austrianew eal &R'@reat >ociety E?L >chool' Jon Gise' Adam >mith'

Lefferson' Lacson' Coolidge



@eorge @ilder conservative author of Fealth andKoverty. He states a successful economy de#ends onthe #roliferation of the rich. On the #olitical level' su##ly+siders looed to reward the most loyal Re#ublican

constituencies. The affluent and business communities. At the same time the ho#ed to reduce the flow of federaldollars to two core emocratic constituenciesS thereci#ient and #rofessional #roviders of heath and welfare#rograms.



The ust #rice is a theory ofethics in economics thatattem#ts to set standards of



fairness in transactions. Fithintellectual roots in ancient@ree #hiloso#hy' it wasadvanced by Thomas

A<uinas based on an

argument against usury'which in his time referred tothe maing of any rate ofinterest on loans. 0t gave rise

to the contractual #rinci#le oflaesio enormis



The Eouisiana Civil Code article %/!9 #ermits Rescission for lesion beyond moiety.0t states that the seller may rescind the sale of an immovable when the #rice' or the#ro#erty it is e$changed for' is less than one half of the fair maret value. >#ecialrules a##ly to e$changes that have one #arty e$changing immovable #ro#erty for ami$ture of immovable or movable #ro#erty' and cashthe #arty e$changing themi$ture of #ro#erty has the right to rescind the e$change' not the #arty e$changing



mi$ture of #ro#erty has the right to rescind the e$change' not the #arty e$changing

the immovable.

The Austrian Civil Code U9( allows the #arty to a contract may rescind it if it receivesless than half of the fair value of the consideration. The other #arty may avertrescission by agreeing to #ay the difference to full value. The laesio enormis has beencritici-ed from a law and economics #ers#ective for its inefficient incentives. 0n many

cases it is im#ossible to #rofit from gathering information because #rofits above thementioned threshold are #rohibited by the law.



>t. Thomas A<uinas "Lust KriceI theory has influence on maret economics today.However' he believed if there was a scarcity caused by a disaster' it would be a sinto radically raise #rices.



The Omnibus reconciliation Act of 19!1. This bill mandatedhuge cuts affecting more than % social and cultural#rograms. The hardest+hit areas were education' theenvironment' health' fuels' food stam#s and the arts.



The Krofession Air TrafficControllers Organi-ation 3KATCO)went on strie. The #resident firedall the stries and a crash coursestarted by &ederal Aviation

Administration #ermanentlyre#laced them.



Fith the lac of success with the KATCOstrie' fewer than 1/2 of the Americanworers belonged to a labor union' thelowest #ro#ortion since before Forld Far00

Reagans deregulation weaened the Lustice de#artmentNs Antitrust ivision' the >ecurities and ;$change Commissionand &ederal Home Eoan ?an ?oard. Earge cor#orations andFall street stoc broerages and investment baning houses.



This causes an un#recedented scandal in the financial andbaning industries. ;s#ecially the savings and loan frauds inlate 19!*s



19!D >avings and Eoan ?ubble. Eac of Trust with regulation not marets causesthis decrease in the economy



The savings and loan crisis of the 19!s and 199s 3commonly dubbed the >VE crisis) was thefailure of 1'( out of the ('%( savings and loan associations in the nited >tates from 19!D to199/5 &>E0C closed or otherwise resolved %9D institutions from 19!D to 19!9 and the RTC closedor otherwise resolved institutions from 19!9 to 199/.P1Q

A savings and loan or thrift is a financial institution that acce#ts savings de#osits and maesmortgage' car and other #ersonal loans to individual members 3a coo#erative venture nown in



g g 3

the nited :ingdom as a building society). ?y 199/' the Resolution Trust Cor#oration 3RTC) hadclosed failed institutions nation+wide' worth a total #ossible boo value of between % and billion' with an estimated cost to American ta$#ayers of 1D billion.P%Q 0n 199D' the @eneral

Accounting Office estimated the total cost to be 1D billion' including 1(%.1 billion taen fromta$#ayers.P(Q

Filliam :. ?lac wrote that Kaul Jolcer as Chairman of the &ederal Reserve >ystem 3founded191( under Kresident Foodrow Filson)' hel#ed create a criminogenic environment for the long+time established community+based financial institutions of the building or savings and loansassociations in 199 by doubling the interest rate 3to reduce inflation)5 >VEs issued long+termloans at fi$ed interest rates using short+term money. Fhen the interest rate increased' the >VEscould not attract ade<uate ca#ital and became insolvent. Rather than admit to insolvency' la$regulatory oversight allowed some C;Os to become reactive control frauds by inventing

creative accounting strategies that turned their businesses into Kon-i schemes that looed highly#rofitable' thereby attracting more investors while actually losing money. This had two effects5 itmeant that the fraud continued longer and substantially increased the economic losses involved'and it attracted o##ortunistic control frauds who were looing for businesses they could subvertinto Kon-i schemes.PQ &or e$am#le' infamous financier Charles :eating #aid /1 million fromGichael GilenNs un bond o#eration for his Eincoln >avings and Eoan Association' which at thetime had a negative net worth e$ceeding 1 million



;lection

of 19!



Recession'



Recovery and

&iscal Crisis

Reagan was a success with5 1) Eowered the unem#loyment rate from 1./ millionnearly 112 before his rule. nem#loyment dro##ed to !2.%) 0nflation went from 1/2 to below /2.() The stoc maret went from D #ts in August to an all time high of %'%% #ts. 0n August of 19!.) 0nnovation such as the use of the 0nternet and Kersonal com#uters rose.



/) Although e$#ort im#ort dro##ed the car industry had to learn from foreign carmanufacturing #lants to u#grade <uality



0nnovation with trade of ideas with La#an

and nited >tates the com#arativeadvantage.

Fith innovation came new forms of #rocessing gas. Off+shoredrilling' Alasa Ki#eline' Cor#orate synthetic fuel. Reagan wasable to stabili-e gas.



Bill Gates of the computer revolution



Young people seemed to adapt to the computer revolution



Ford Krocessingrevolutioni-ed thebusiness andeducational



communities with#ersonali-edcom#uters. Theseare 0?G and

=ero$innovations.Gicrosoft will bethe off shot of

these word#rocessingcom#anies. Again19! innovation



;arly form of #ersonal com#uter. Garet value increased because of a toolto save time and increase the <uality of a #roduction.



Com#uter technology too off

in >ilicon Jalley Californiawith inventions of cell #honesand com#uter technology.

Arcade games and video games had been growing in #o#ularity since the late 19s' and by 19!% were a

maor industry. ?ut a variety of factors' including a glut of low+<uality games and the rise of home com#uters'caused a tremendous crash in late 19!(. &or the ne$t three years' the video game maret #ractically ceased toe$ist in the >. ?ut in the second half of the decade' it would be revived by intendo' whose &amicom consoleand mascot Gario had been enoying considerable success in La#an since 19!(. Renamed the intendo;ntertainment >ystem' it would claim 92 of the American video game maret by 19!9.

Kersonal com#uters e$#erienced e$#losive growth in the N!s' going from being a toy for electronics hobbyists



to a full+fledged industry. The 0?G KC' launched in 19!1' became the dominant com#uter for #rofessionalusers. Commodore created the most #o#ular home com#uters of both !+bit and 1D+bit generations. G>=standard was the dominant com#uter #latform in La#an. A##le #hased out its A##le 00 and Eisa models' andintroduced the first Gacintosh com#uter in 19!. 0t was the first commercially successful #ersonal com#uter touse a gra#hical user interface and mouse'P9Q which started to become general features in com#uters after themiddle of the decade

Falman and ?oombo$es' introduced during the late 19s' became very #o#ular and had a #rofoundim#act on the Gusic industry and youth culture. Consumer JCRs and video rental stores becamecommon#lace as JH> won out over the com#eting betama$ standard. 0n addition' in the early 19!s variouscom#anies began selling com#act' modestly #riced synthesi-ers to the #ublic. This' along with thedevelo#ment of Gusical 0nstrument igital 0nterface 3G00)' made it easier to integrate and synchroni-esynthesi-ers and other electronic instruments' lie drum machines' for use in musical com#osition.

High definition television 3HTJ) of both the analog and digital variety were first develo#ed in the 19!s



though their use did not become wides#read until the mid %s.

19! ?etaversus JH>



Fars.JH> won yet

evolutiontoo over

JH> withJs

;mail too on another #ersonality fromthe innovations and com#uter #rogress.



0n ew ,or theconstruction of the19 Forld Trade



Center symboli-ed theshift frommanufacturing obs toservice obs. Thisbuilding caused thedis#lacement of smallelectronics' #rinting andother firms causing theloss of thousands



A Two

Tiered>ociety

own side of Reagan was the national debt51)The national debt tri#led growing from 91 in 19! to over %. trillion in 19!9more that the federal government had accumulated in in its entire #revioushistory. 12 of the national budget went to interest. ?ig deficits e#t interest rateshigh.%)The dollar was over valued since @overnment bonds were attractive thus bring



in ca#ital from other countries but nited >tates was indebted to foreigners to( ?illion.() ifficult to trade since American dollar was too high.



>tengths of Reaganomics5 1) Kroduction increase %)0nvention Feanesses5 1) Fidening ga# rich and #oor %)ebt increased



The million dollar <uestion why the government was in debt7>ome say it was greed of businessmen a) ;nron >candal b) >avings andEoans >candals.

Garet economics wors but it must be e$ecuted correctly.



0n the 19!s' he ran American Continental

Cor#oration and the Eincoln >avings and Eoan Association' and too advantage of loosenedrestrictions on baning investments.P1Q Hisenter#rises began to suffer financial #roblemsand were investigated by federal regulators.His financial contributions to' and re<uests for

l t i t ti f fi itti >



regulatory intervention from five sitting .>.senators led to those legislators being dubbedthe :eating &ive.Fhen Eincoln failed in 19!9' it cost the federalgovernment over ( billion and about %('customers were left with worthless bonds. 0nthe early 199s' :eating was convicted in bothfederal and state courts of many counts offraud' raceteering and cons#iracy. He servedfour and a half years in #rison before thoseconvictions were overturned in 199D. 0n 1999'he #leaded guilty to a more limited set of wirefraud and banru#tcy fraud counts' and wassentenced to the time he had already served.

Gilen was indicted for raceteeringand securities fraud in 19!9 in aninsider trading investigation. As theresult of a #lea bargain' he #led guiltyto securities and re#orting violationsbut not to raceteering or insider

t di Gil t d t t



trading. Gilen was sentenced to tenyears in #rison' fined D million' and#ermanently barred from the securitiesindustry by the >ecurities and;$change Commission. His sentencewas later reduced to two years for

coo#erating with testimony against hisformer colleagues and for goodbehavior.P%Q

His critics cited him as the e#itome ofFall >treet greed during the 19!s'and nicnamed him the Lun ?ond:ing.



;nron was formed in 19!/ by :enneth Eay after merging Houston atural @as and 0nterorth.

>everal years later' when Leffrey >illing was hired' he develo#ed a staff of e$ecutives that' bythe use of accounting loo#holes' s#ecial #ur#ose entities' and #oor financial re#orting' were ableto hide billions of dollars in debt from failed deals and #roects. Chief &inancial Officer Andrew&astow and other e$ecutives not only misled ;nronNs board of directors and audit committee onhigh+ris accounting #ractices' but also #ressured Andersen to ignore the issues.

;nron shareholders filed a billion lawsuit after the com#anyNs stoc #rice which achieved ahigh of >9 / #er share in mid % #l mmeted to less than 1 b the end of o ember



;nron shareholders filed a billion lawsuit after the com#any s stoc #rice' which achieved ahigh of >9./ #er share in mid+%' #lummeted to less than 1 by the end of ovember%1.P%Q The .>. >ecurities and ;$change Commission 3>;C) began an investigation' and rivalHouston com#etitor ynegy offered to #urchase the com#any at a very low #rice. The deal failed'and on ecember %' %1' ;nron filed for banru#tcy under Cha#ter 11 of the nited >tates?anru#tcy Code. ;nronNs D(. billion in assets made it the largest cor#orate banru#tcy in .>.history until ForldComNs banru#tcy the ne$t year.P(Q

Gany e$ecutives at ;nron were indicted for a variety of charges and some were later sentencedto #rison. ;nronNs auditor' Arthur Andersen' was found guilty in a nited >tates istrict Court ofillegally destroying documents relevant to the >;C investigation which voided its license to audit#ublic com#anies' effectively closing the business. ?y the time the ruling was overturned at the.>. >u#reme Court' the com#any had lost the maority of its customers and had ceasedo#erating. ;m#loyees and shareholders received limited returns in lawsuits' des#ite losingbillions in #ensions and stoc #rices. As a conse<uence of the scandal' new regulations andlegislation were enacted to e$#and the accuracy of financial re#orting for #ublic com#anies.PQOne #iece of legislation' the >arbanes+O$ley Act' increased #enalties for destroying' altering' orfabricating records in federal investigations or for attem#ting to defraud shareholders.P/Q The actalso increased the accountability of auditing firms to remain unbiased and inde#endent of theirclients.P

&ollowing the %1 scandal in which 1bn in revenue from energy giant ;nron was found to have sustained

itself by means of institutional and systematic accounting fraud' AndersenNs #erformance and allegedcom#licity as an auditor came under intense scrutiny. On Lune 1/' %%' Andersen was convicted ofobstruction of ustice for shredding documents related to its audit of ;nron' resulting in the ;nron scandal.

Although the conviction was later reversed by the >u#reme Court' the im#act of the scandal combined with thefindings of criminal com#licity ultimately destroyed the firm. ancy Tem#le 3Andersen Eegal e#t.) and aviduncan 3Eead Kartner for the ;nron account) were cited as the res#onsible managers in this scandal as theyhad given the order to shred relevant documents. >ince the .>. >ecurities and ;$change Commission cannotacce#t audits from convicted felons' the firm agreed to surrender its CKA licenses and its right to #ractice

before the >;C on August (1 %%effectively #utting the firm out of business 0t had already started winding



before the >;C on August (1' %%effectively #utting the firm out of business. 0t had already started windingdown its American o#erations after the indictment' and many of its accountants oined other firms. The firmsold most of its American o#erations to :KG@' eloitte V Touche' ;rnst V ,oung and @rant Thornton EEK. Thedamage to AndersenNs re#utation also destroyed the viability of the firmNs international #ractices. Gost of themwere taen over by the local firms of the other maor international accounting firms.

The Andersen indictment also #ut a s#otlight on its faulty audits of other com#anies' most notably Faste

Ganagement' >unbeam' the ?a#tist &oundation of Ari-ona and ForldCom. The subse<uent banru#tcy ofForldCom' which <uicly sur#assed ;nron as the then biggest banru#tcy in history 3the record is now held byEehman ?rothers and Fashington Gutual) led to a domino effect of accounting and lie cor#orate scandalsthat continue to tarnish American business #ractices.

On Gay (1' %/' in the case Arthur Andersen EEK v. nited >tates' the >u#reme Court of the nited >tatesunanimously reversed AndersenNs conviction due to what it saw as serious flaws in the ury instructions.P1(Q 0nthe courtNs view' the instructions were far too vague to allow a ury to find obstruction of ustice had really

occurred. The court found that the instructions were worded in such a way that Andersen could have beenconvicted without any #roof that the firm new it had broen the law or that there had been a lin to any official#roceeding that #rohibited the destruction of documents. The o#inion' written by Chief Lustice FilliamRehn<uist' was also highly se#tical of the governmentNs conce#t of corru#t #ersuasion#ersuadingsomeone to engage in an act with an im#ro#er #ur#ose even without nowing an act is unlawful.



Cartoonist David Jacobson’s comment on the

Enron scandal



<a22e vs=niversity ofCalifornia



Gichigan niversity was also sued for admissions #olicy



& i i ti



&ermini-ation

of Koverty

?y 199% female headed households com#rising 1(. million #eo#le accountedfor (2 the nation*s #oor. Among blac women the of female headedincreased in ust on decade from (2 in 19 to 2 in 19!. Gore than half ofall blac babies were now born to unmarried mothers.



There was a A&C Aid to

&amilies with



&amilies withe#endentChildren with

#ayments offood stam#s for

unem#loyedsingle mothers

; id i



;#idemics5

rugs A0>'Homelessness



Reagan*s >ocial #rograms

we to "Lust say o to drugs.Ginimi-e affirmative action

0n 19!% the Reagan administration declared a highly #ublici-ed "war on drugsI amultibillion dollar #aramilitary o#eration to halt drug trafficing.. &irst Eady ancyReagan*s Lust >ay oI #rogram was one of education.



The

AID!uilt



Researchers in Atlanta CC called the new disease Ac<uired 0mmune eficiency >yndrome A0> and identifiedthe means of transmissions he e$change of bodily fluidssuch as semen and blood' Homose$ual men were morea#t to ac<uire A0>. The CC has accumulated the deathtoll of A0> as high as D'(.



This is a chart of the homeless in shelters slee#ing each night. The e#artmentof Housing and rban evelo#ment #laced the number of homeless between%/' and (/'. However' many advocates of the homeless say thenumber is ( million



T d



Toward a

ew ForldOrder

; il



;vil;m#ire



nited >tates defense s#ending increase /2 to reach 1./ Trillion to accom#lish

the largest military buildu# in #eacetime. Reagan launched a %D ?illion dollar#rogram called >tar Fars to efeat the evil em#ire. Reagan said it was defensemechanism but was actually a lie. There was a build u# of 0ntercontinental ballisticmissiles or 30C?G)



TheR



Reagan

octrine



Reagan was successful with Afghanistan in defeating Al+Maida. Reagans#ent billions of nited >tates dollars to the Guahedeen to fightcommunist



Reagan s#ent more in the defense of Eatin America between 19! and 19!(than the nited >tated did in ( ,ears. 0n October ' 19!( the administratingdirected the nited >tates Garines to invade @ranada claiming that the tinyisland governed by Gar$ism since 199 had become Cuban military base andtherefore was an out#ost for Communism. Reagan ustified himself by saying wegot there ust in time.



0n other nations such as >alvador thissore of unilateral military action#roved more #olitically and

strategically more difficult to carry out.Reagan directed nearly / ?illion to



Reagan directed nearly / ?illion toshore u# ;l >alvador #ro Americanyet highly re#ressive regime. ?y 19!(

the right wing death s<uad hadtortured and assassinated thousandsof o##osition leader. The election ofcentrist #resident Lose a#oleonuarte in 19! failed to end the

bloody civil war and too one out ofhundred >alvadorans.



The >alvadoran Civil Far 3199W199%) was a conflict between the military+led

government of ;l >alvador and the &arabundo GartX ational Eiberation &ront3&GE)' a coalition or Numbrella organi-ationN of five left+wing guerrilla grou#s. A cou#on October 1/' 199 led to the illings of anti+cou# #rotesters by the government aswell as anti+disorder #rotesters by the guerillas' and is widely seen as the ti##ing #ointtowards the civil war.P%1Q

?y Lanuary 19!' the left+wing #olitical organi-ations united to form the CRG3Coordinated Revolutionaries of the Gasses) and a few months later the left+wing

d it d t f th R 3 ifi d R l ti i t t ) hi h



armed grou#s united to form the R 3nified Revolutionary irectorate) which'following its merging with the Communist #arty in October 19!' was renamed the&GE.P%%Q

The full+fledged civil war lasted for over twelve years' and saw e$treme violence fromboth sides. 0t also included the deliberate terrori-ing and targeting of civilians by deaths<uads' the recruitment of child soldiers' and other violations of human rights' mostlyby the military.P%(Q An unnown number of #eo#le disa##eared during the conflictand the re#orts that more than /' were illed.P%Q The nited >tatescontributed to the conflict by #roviding large amounts of military aid to the governmentof ;l >alvador during the CarterP%/Q and Reagan administrations.

0n 199' the began #eace negotiations and on Lanuary 1D' 199%' a finalagreement' The Cha#ulte#ec Keace Agreement'P%DQ was signed by the combatants inGe$ico City' formally ending the conflict



Lean onovan was born to Katricia and Raymond onovan' who raised her in an u##er middle+class home in Fest#ort'Connecticut. >he had an older brother' Gichael.P1Q >he attended Gary Fashington College in Jirginia 3now the niversity ofGary Fashington)'P%Q and s#ent a year as an e$change student in 0reland at niversity College Cor' dee#ening her RomanCatholic faith through her contact with a #riest there who had been a missionary in Keru.P1Q

#on the com#letion of her masterNs degree in business from Case Festern Reserve niversity'P1Q she acce#ted a #osition as amanagement consultant for the Cleveland branch of the nationwide accounting firm' Arthur Andersen.P%Q

onovan was engaged to a young #hysician' ouglas Cable' and felt a strong call to motherhood as well as her call to domission wor5 ...0 sit there and tal to @od and say NFhy are you doing this to me7 Fhy canNt 0 ust be your little suburbanhousewife7N P1Q

Fhile volunteering in the Cleveland iocese ,outh Ginistry with the #oor' she decided to oin the iocesan Gission Kroect in ;l

>alvador. >he was acce#ted into and com#leted the lay+missionary training course at Garynoll in ew ,or >tate.

onovan traveled to ;l >alvador in Luly 19' where she wored as a lay missioner in Ea Eibertad' along with orothy :a-el' anrsuline nun. The #air wored in the #arish of the Church of the 0mmaculate Conce#tion in Ea Eibertad' #roviding hel# torefugees of the >alvadoran Civil Far and the #oor. They #rovided shelter' food' trans#ortation to medical care' and they buriedthe bodies of the dead left behind by the death s<uads.P%Q

onovan was a follower of Archbisho# Yscar Romero' and often went to his cathedral' the Catedral Getro#olitana de >an



nsert map> p 111?



The >andinistas in ?lac started to gain stronger control of icaragua. 0n 19! theC0A secretly mined icaraguan harbors. Fhen icaragua won a udgment againstthe nited >tates in the Forld Court over this violation of its sovereignty' the

Reagan administration refused to recogni-e the courts urisdiction and ignored theverdict. 0n 19! the Congress sought to rein in the cover war by #assing the?oland Amendment. 0t forbade government agencies for su##orting any#aramilitary o#eration in icaragua.



Contra*s were freedom fighters for the nited >tates down inicaragua they had to fight the >andinistas who were communistsand close to Russia and Cuba.



?oland Amendment #lace a #olitical tension. How do we sto#communism in icaraguan lands.



The Giddle;ast and the



The Giddle;ast and the

0ran+Contra

>candal



?rendan >ullivan wasthe lawyer for Oliverorth. He was a folhero for the American

Keo#le who saw himeveryday on TJ

The nited>tates withoutCongress

sanctions gavesu##ort toContras 3anti+communist



0n 19!D Reagans advisers changed course and began secret negotiation with the

revolutionary 0ranian government. The nited >tated eventually offered to su##ly 0ranwith wea#ons for use against 0ra< in e$change for hel# in securing he release of Americans who were being held hostage by radical 0slamic grou#s in Eebanon.iscussion elevated. The arms for hostages deal into a maor scandal. The American#ublic soon learned the sordid details from investigative ournalist and television in thesummer of 19!. The >C had sold missiles to the 0ranians using 0srael for a o+

between. The #ublic also found out that millions of dollars from the wea#ons sale hadbeen secretly diverted into cover aid for the icaraguan Contras a blatant and illegaldisregard for the ?oland Amendment



disregard for the ?oland Amendment

The administration #oured in funds to combatinsurgencies against the governments of ;l >alvador and@uatemala' whose armies associated death s<uadscommitted flagrant abuses against their own citi-ens.

Fhen ;l >alvador*s army massacred hundreds ofcivilians in the town of ;l Go-ote in 19!1 the >tate t t d i d th t th t t l



e#artment denied that the event too #lace



Colonel Oliver orth too center stage and defended his grossly illegal action inthe name of #atriotism. ,et' Admiral Lohn Koinde$ter*s administration had to lie toCongress shred evidence and refused to ee# the #resident in informed in ordert guarantee his #lausible deniability. The full role of C0A irector Filliam Caseydied in 19!' #articularly his relationshi#s with orth and the #resident remainedmur. ?oth orth and Koinde$ter we convicted of felonies. ?ut higher courseoverturned their convictions on technical gourds. Reagan when #ress in whatha##en' 0Nm still trying to find outI



Admiral Lohn Koinde$ter



Terrorist acts including sei-ing Festern hostages and bombing commercialair#lanes continued to redefine the #olitics of the Giddle ;ast. The Reaganadministration insisted the hind international terrorism lay the >oviet bloc' the Ayatollah :homeini of of 0ran Eibyan leader Guammur el+Maddafi.



The son of an im#overished ?edouin goat herder' @addafi became involved in #olitics while at school

in >abha' subse<uently enrolling in the Royal Gilitary Academy' ?engha-i. &ounding a revolutionarycell within the military' in 19D9 they sei-ed #ower from the absolute monarchy of :ing 0dris in abloodless cou#. ?ecoming Chairman of the governing Revolutionary Command Council 3RCC)' heabolished the monarchy and #roclaimed the Re#ublic. Ruling by decree' he im#lemented measuresto remove what he viewed as foreign im#erialist influence from Eibya' and strengthened ties to Arabnationalist governments. 0ntent on #ushing Eibya towards 0slamic socialism' he introduced sharia asthe basis for the legal system and nationali-ed the oil industry' using the increased revenues tobolster the military' im#lement social #rograms and fund revolutionary militants across the world. 0n

19( he initiated a Ko#ular Revolution with the formation of @eneral Keo#leNs Committees 3@KCs)'#ur#orted to be a system of direct democracy' but retained #ersonal control over maor decisions. Heoutlined his Third 0nternational Theory that year' #ublishing these ideas in The @reen ?oo.



0n 19' he dissolved the Re#ublic and created the Lamahiriya' a state of the masses #art+governedby @KCs. Officially ado#ting a symbolic role in governance' he retained #ower as militarycommander+in+chief and head of the Revolutionary Committees res#onsible for #olicing andsu##ressing o##onents. Overseeing unsuccessful border conflicts with ;gy#t and Chad' @addafiNssu##ort for foreign militants and alleged res#onsibility for the Eocerbie bombing led to EibyaNs label ofinternational #ariah. A #articularly hostile relationshi# develo#ed with the nited >tates and nited:ingdom' resulting in the 19!D .>. bombing of Eibya and nited ations+im#osed economicsanctions. Reecting his earlier ideological commitments' from 1999 @addafi encouraged economic#rivati-ation and sought ra##rochement with Festern nations' also embracing Kan+Africanism andhel#ing to establish the African nion. Amid the Arab >#ring' in %11 an anti+@addafist u#rising led bythe ational Transitional Council 3TC) broe out' resulting in civil war. ATO intervened militarily on

the side of the TC' bringing about the governmentNs downfall. Retreating to >irte' @addafi wasca#tured and illed by TC militants.

&all ofC i



&all ofCommunism



&all of?erlin

Fall19!9




4 Conservatives and 'ea%an

4 'ea%an and the Cold 5ar



0n 19!! @orbachev began #ulling >oviet troo#sout of Afghanistan. Having entered office as anardent Cold Farrior'



A :inder



A :inder'

@entleration



?acground was with C0A and China Ambassador

Reagan*s>uccessor



Reagan s>uccessor

@eorge

H.F. ?ush



Filliam ?ennett was a##ointed to the #osition of "rug C-arI and outlined

a #lan to increase funding for more #olice and #rison. He also fortified theborder #atrols in and attem#t to stem the flow of drugs from Eatin America.

?ennett was born in ?roolyn' the son of ancy3nZe Falsh)' a medical secretary' and &. Robert?ennett' a baner.P1QP%Q He moved to

Fashington' .C.' where he attended @on-agaCollege High >chool. He graduated fromFilliams College' where he was a member ofThe :a##a Al#ha >ociety' and went on to earna Kh from the niversity of Te$as at Austin in



a Kh.. from the niversity of Te$as at Austin inKolitical Khiloso#hy. He also has a L.. fromHarvard Eaw >chool

Kresident ?ush sent nited >tates troo#s to Kanama on a mission to

ca#ture @ernal Ganuel oriega' an international drug dealer who had beenon the C0A #ayroll Thousand of Kanamanians died before oriega was taeninto custody and brought to nited >tates to stand trial. rug control tri#led.



$eneral 7an"elAntonio@orie a



Clean Air



Clean Air Act



The



The

Kersian@ulf Far

The nited ation sanctions against 0ra< an there invasion of :uwaitdid little. The nited >tated announce on Lanuary 1991 the start ofO#eration esert storm. On &ebruary %' 1991 the nited >tatesentered and too over 0ra< with huge success. The nited >tatesonly lost 1! deaths com#ared to nearly 1' 0ra<uian deaths.



Kresident ?ush identified the @ulf Far as the first ste# in the struggle to createa world rooted in democracy and global free trade. >oon after the end of thewar @eneral Colin Kowell' chairman of the Loint Chiefs of >taff and ic

Cheney' the >ecretary of efense' outlined different visions of the future. &orthe rest of the 199*s it was not certain which definition of the American role inthe #ost Cold Far world would #redominate



The $"lf 5ar



htt#566www.youtube.com6watch7v8f!e9J!?C=0



0n &ebruary 1991' the nited >tatesEaunched O#eration esert >torm'which <uicly drove the 0ra<i army from

:uwait. Tens of thousands of 0ra<isand 1! Americans died



The ;conomyand the ;lection



of 199%



(lectionof Clinton



"erbert Bloc#’s $%%& cartoon



?ritish Cartoonist uses the K;A:a##roach with #olitical cartoonses#ecially #eo#le6#residents.arasy studies the #ower of #olitical

cartoons as being stronger thanwords.

Cold Farand ?retton



Foods not inte$t



0n 191 for the first time in the twentieth century' thenited >tates e$#erienced a merchandise trade deficit'that is it im#orted more goods than it e$#orted. ?y19! nearly three <uarters of good and #roduced in thenited >tates were com#eting with foreign made#roducts and number of manufacturing worers. (!2of the American worforce in 19D had fallen to %!2.Gore over' the war in Jietnam #roduced ever+higherfederal deficits and rising inflation



federal deficits and rising inflation



Gisery 0nde$ is the sum of the unem#loyment and inflation

rates. ?y 199 La#an had become the world*s leadingautomobile #roducer for nearly %/2 of our cars

college on campus: american history chapter 30

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