RAH Day 35 AgendaRAH Day 35 AgendaRAH Day 35 AgendaRAH Day 35 AgendaGoal – to understand how Ronald Reagan was both similar to and

different from previous presidents. To understand how his views of foreign policy differed from others and the effects these policies had.

• Review last few questions about Reaganomics• Complete p 20 – analyze the cartoon about Reagan’s policies –

answer the attached 3 questions• Complete p 22 about social situation in 80s (see some video)• Complete p 23 foreign policy under Reagan and Bush 41• Complete p 24 and 25 about the middle east

From Hype to FearFrom Hype to FearPaul Krugman – New York Times, Jan 7, 2008

Not to put too fine a point on it, Barack Obama won his impressive victory in Iowa with a sunny, upbeat message of change.

But there’s a powerful political faction in this country that understands very well that any real change will create losers as well as winners. In particular, any serious progressive reform of health care, let alone a broader attempt to reduce middle-class insecurity and inequality, will have to mean higher taxes on the affluent. And members of that faction will do whatever it takes to scare people into believing that change means disaster for the economy.

Goal: stimulate economy

Method: cut gov’t spending on social programs and lowered income taxes

Result: Slashed poverty programs like Women, Infant and Child (WIC) program cut even though 22% of all US children lived in poverty, cut school lunch program and student loans.

No spending on AIDS research until after 1986

Massive Tax cuts for the rich - top tax rate decreased from 70% in 1980 to 50% in 1982 to 28% in 1988 while the tax rate for the median income 1980 – 28%, 1982 - 29%, 1988 – 28%

Gap between rich and poor got wider, cities got poorer

Little change in SS & Medicare

Recession until 1982, then significant GDP growth to 1989, decrease in inflation, increase in jobs, wages, and confidence in economy

Massive increase in national debt and federal government yearly deficits,

Trade deficit

p 8 - Conservative Policies Under Reagan and Bush p 8 - Conservative Policies Under Reagan and Bush

- - ReaganomicsReaganomics

Reagan’s solutions to the above Reagan’s solutions to the above problemsproblems

Supply-Side economics = ReaganomicsSupply-Side economics = Reaganomics1. Cut gov’t spending, especially entitlement programs2. Cut taxes, especially on businesses and the wealthy3. Simplify the depreciation schedule4. Cut business regulations including environmental

enforcement5. Improve monetary policy6. Promote confidence in the US7. Cut and limit government activity related to business

Producer/supplier of goods and services

Consumer of goods and services

Keynesian policy

Government

$$$ - welfare, jobs, housing subsidies, food stamps

1. Cut gov’t spending, especially entitlement programs2. Cut taxes, especially on businesses and the wealthy3. Simplify the depreciation schedule4. Cut business regulations including environmental

enforcement5. Improve monetary policy6. Promote confidence in the US7. Cut and limit government activity related to business

Reagan’s solutions to the above Reagan’s solutions to the above problemsproblems

Supply-Side economics = ReaganomicsSupply-Side economics = Reaganomics

Producer/supplier of goods and services

Consumer of goods and services

Supply side policy

Government

Business tax cuts, investment tax cuts, deregulation, lower interest rates

Trickle

$ $ $Down

Goal: stimulate economy

Method: increase spending on military

Result: new weapons systems like MX nuclear missile, the B-1 long-range bomber

Plans for the Strategic Defense Initiative SDI otherwise known as Star Wars

Huge budget deficits and national debt increases

Goal: promote traditional values and morality

Method: naming conservative judges to federal judiciary

Results: overturned or weakened laws about abortion (but it remained legal today), affirmative action, civil rights for women, criminal rights and discrimination protections (especially for gays and women)

Other methods – pushing for tougher laws against drugs, indecency

p 8 - Conservative Policies Under p 8 - Conservative Policies Under Reagan and BushReagan and Bush

Goal: reduce the size and power of federal gov’t

Method: deregulate savings and loan industry (and other industries)

Results: huge screw up in the S and L industry leading to massive bankruptcies of these institutions and the FSLIC bailout of over $200 billion

Increases in mergers and acquisitions leading to massive new companies but also new innovations and competition leading to lowered prices and better products

Method: cut EPA

Result: severe decrease in environmental prosecutions, increased logging, grazing and mining and sale of public lands leading to increased pollution and habitat loss

p 8 - Conservative Policies Under p 8 - Conservative Policies Under Reagan and BushReagan and Bush

compared average income

32,000

33,000

34,000

35,000

36,000

37,000

38,000

1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992

year

inco

me

in 2

005

$

average income in 2005 $

Mean (average) family income in current 2005 $ – Piketty and Saez Mean (average) family income in current 2005 $ – Piketty and Saez (2006)(2006)

bottom quintile mean income

12000

12500

13000

13500

14000

14500

15000

15500

bottom quintile mean income

Bottom Quintile Mean family income -current 2005 $ – US Census Bottom Quintile Mean family income -current 2005 $ – US Census Bureau CPSBureau CPS

2nd quintile mean income

28000

29000

30000

31000

32000

33000

34000

2nd quintile meanincome

2nd Quintile Mean family income -current 2005 $ – US Census Bureau 2nd Quintile Mean family income -current 2005 $ – US Census Bureau CPSCPS

middle quintile mean income

420004300044000450004600047000480004900050000510005200053000

middle quintile meanincome

3rd Quintile Mean family income -current 2005 $ – US Census Bureau 3rd Quintile Mean family income -current 2005 $ – US Census Bureau CPSCPS

4th quintile mean income

580006000062000

64000660006800070000

720007400076000

4th quintile meanincome

4th Quintile Mean family income -current 2005 $ – US Census Bureau 4th Quintile Mean family income -current 2005 $ – US Census Bureau CPSCPS

top quintile mean income

0

20000

40000

60000

80000

100000

120000

140000

160000

top quintile meanincome

Top Quintile Mean family income -current 2005 $ – US Census Bureau Top Quintile Mean family income -current 2005 $ – US Census Bureau CPSCPS

top 5% mean income

0

50000

100000

150000

200000

250000

top 5% mean income

Top 5% Mean family income -current 2005 $ – US Census Top 5% Mean family income -current 2005 $ – US Census Bureau CPSBureau CPS

comparative mean income by quintile

0

50000

100000

150000

200000

250000

year

curr

ent 2

004

$

lowest 20%

2nd 20%

middle 20%

4th 20%

top 20%

top 5%

Comparing Quintiles Mean family income in current 2005 $ – US Comparing Quintiles Mean family income in current 2005 $ – US Census - CPSCensus - CPS

Nations Key people Events trends

USSR Mikhail GorbachevBoris Yeltsin

Perestroika, Glasnost, START, INF, Fall of USSR

Democratization, capitalism, failure of communism, warming of relations

Poland New constitution, fall of communism

Democratization, capitalism

Germany Fall of Berlin wallReunification

Democratization

Yugoslavia

Slobodan Milosovic

Balkanization and 2 civil wars

Democratization, capitalism, genocide

China Deng Xioaping, Li Peng

Tiananmen Square Economic reform

Strengthening authoritarianism, capitalism, GDP growth

Nicaragua Somoza, Ortega, chamorro, contras, Sandanistas

Civil war, CIA activities, aid to contras, Boland A.

Democratization,

Nations Key individuals events Trends

Panama Noriega, Bush drug dealingInvasion of panama, arrest of Noriega

War on drugs, yankee imperialism

Iran Ayatollah Khomeini, Reagan, Ollie North, Larry Walsh

Iran-Iraq War, Hostages & civil war in Lebanon, trading guns for money for hostages

Lying to Congress, law breaking, hypocrisy

Iraq Saddam Hussein, GHW Bush, Colin Powell, Norman Schwartzkopf

War with Iran, money and weapons for Hussein, war against Iraq

War and mistakes

Locations of CIA covert operations to overthrow unwanted leftist governments

$$

$$

median married family income

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992

year

inco

me

in c

urre

nt 2

004

$

Series1

Median family income in current 2005 $ – US Census Bureau Current Median family income in current 2005 $ – US Census Bureau Current Population SurveyPopulation Survey