The End of The Cold War

Post-Reagan Election•Americans looking for continuation of

Reagan politics▫Low taxes, Little Government Involvement

with Economy

•Republican nominee: George H.W. Bush▫“Read my lips, no new taxes”

•Democratic nominee: Michael Dukakis▫Jesse Jackson finishes second in primary

Election of 1988•Democrats question Bush’s leadership

•Republicans say Dukakis is too liberal and soft on crime

•Bush has Reagan’s endorsement and economy continues to improve

Soviet Union•Bush continues to work with Gorbachev

•Soviet economy failing due to poor central planning and arms race

•Perestroika: “restructuring”▫Allowed some private enterprise and profit

making in USSR

•Glasnost: “openness”▫Freedom of religion and speech grew in

USSR

1989 Revolutions•Democratic governments replace

Communist rulers in Eastern Europe▫Bulgaria▫Czechoslovakia▫Hungary▫Poland▫Romania

•November 9: Berlin Wall guards open gates▫Within days the wall was gone▫Germany reunited within one year

Soviet Union Collapses• Opposition to Gorbachev

▫Communist officials and army try to overthrow gov’t▫Gorbachev arrested and troops enter Moscow▫Army proceeds to go to Russian president

• Boris Yeltsin defeats coup▫50,000 people surround the Russian Parliament▫Bush backs Yeltsin▫Coup fails; Gorbachev returns to Moscow

• 15 Soviet republics declare independence, Yeltsin outlaws Communist Party in Russia▫Gorbachev announces end of Soviet Union in 1991

Global Challenges Emerge•China determined to remain Communist

▫Government relaxed controls on economy, but still restricted speech

▫Tiananmen Square (May 1989—Beijing) Chinese students and workers protest for

democracy In June, government tanks and soldiers try to

end protests with many casualties and arrests

Result of Tiananmen Square•US and European countries reduce

diplomatic relations with China

•Arms sales to China reduced

•World Bank suspends loans to China

Panama•1978: US agreed to give canal to Panama by 2000

•Canal strategically important, so Bush and US officials wanted to make sure Panama’s government was stable and pro-US

•Dictator Manuel Noriega stopped working with US by 1989▫Backed drug traffickers, harassed US military

guarding canal, cracked down on opponents▫December 1989: US troops seize Noriega on drug

charges and US sets up elections for new government

Persian Gulf War• 1990: Iraq’s Hussein invades Kuwait

▫US fears this is first step in seizing many oil reserves

▫UN coalition to stop Iraq—threatens to use force

• October 31, 1990: US plans attack of Iraq▫General Colin Powell and Sec. of Defense Dick Cheney▫500,000 American troops and air strikes

• January 1991: Operation Desert Storm▫Air strikes on military targets; ground attack 6 weeks

later

Domestic Challenges for Bush•Growing Deficit

•Economy plunging with recession and increasing unemployment

▫Less soldiers, less military equipment orders

▫Downsizing (laying off workers to increase efficiency)

▫Gigantic debt▫The ugly side of deregulation (risks and

failures)

Bush Attempts to Improve Economy

•Cut Capital Gains Tax▫Tax paid by businesses and investors when

they sell stocks or real estate for profit▫Believed this would encourage business

expansion▫Democrats defeated this saying it was a tax

cut for the rich

•Changed his “no new taxes” policy▫Increased taxes and cut spending to attempt

to improve deficit▫Hurt his reelection chances

1992 Election•Democrats: William Jefferson Clinton

▫Stories questioned his character▫Did not serve in Vietnam▫Tried to separate himself from “liberal” label▫Promised to cut middle-class taxes, reduce gov’t

spending, and reform healthcare and welfare

•H. Ross Perot▫Texas billionaire and businessman▫Stressed end to deficit spending▫Grassroots movement: local level

organizations