Chapter 40: The Resurgence of Conservatism

I. The Election of Ronald Reagan 1980

2. He skillfully mobilized political resentments in a manner reminiscent of his early political hero, Franklin D. Roosevelt. Both Roosevelt and Reagan championed the “common man” against vast impersonal menaces that overshadowed the individual. But where the Democratic Roosevelt had branded big business the foe of the “forgotten man,” the Republican Reagan depicted big government as the archvillain.
3. Ronald Reagan was well suited to lead the gathering conservative crusade. Reared in a generation whose values were formed well before the upheavals of the 1960s, he naturally sided with the new right on social issues.
5. He preached a “populist” political philosophy that condemned federal intervention in local affairs, favoritism for minorities, and the elitism of arrogant bureaucrats.
7. Though Reagan was no intellectual, he drew on the ideas of a small but influential group of thinkers known as “neoconservatives.” 
8. Their ranks included Norman Podhoretz, editor of Commentary magazine, and Irving Kristol, editor of The Public Interest.

II. The Reagan Revolution

• Reagan’s arrival in Washington was triumphal. The Iranians contributed to the festive mood by releasing the hostages on Reagan’s Inauguration Day, January 20, 1981, after 444 days of captivity.
• Reagan assembled a conservative cabinet of the “best and the rightest” and relied on these and other advisers to make important decisions. 
• The cabinet included a highly controversial Coloradan, James Watt, as secretary of the interior. Watt was a product of the “Sagebrush Rebellion,” a fiercely anti-Washington movement that had sprung up to protest federal control over the rich mineral and timber resources in the western states. 
• Environmentalists howled loudly about Watt’s schemes to hobble the Environmental Protection Agency and to permit oil drilling in scenic places. After bitter protests they succeeded in halting Watt’s plan to allow oil exploration off the California coastline.
•  Watt blithely rebuffed critics by saying, “I make lots of mistakes because I make lots of decisions.” He made one mistake too many in 1983, when he thoughtlessly told an offensive ethnic joke in public and was forced to resign.
• By the early 1980s, this antigovernment message found a receptive audience. In the two decades since 1960, federal spending had risen from about 18 percent of gross national product to nearly 23 percent. At the same time, the composition of the federal budget had been shifting from defense to entitlement programs, including Social Security and Medicare.
•  In 1973 the budget of the Department of Health, Education, and Welfare surpassed that of the Department of Defense.

III. The Battle of the Budget

• Swept along on a tide of presidential popularity,Congress swallowed Reagan’s budget proposals approving expenditures of some $695 billion, with a projected deficit of about $38 billion.Reagan’s triumph amazed political observers,especially defeated Democrats. 

1. The new president had descended upon Washington like an avenging angel of conservatism, kicking up a blinding whirlwind of political change. 
2. He sought nothing less than the dismantling of the welfare state and the reversal of the political evolution of the preceding half-century. His impressive performance demonstrated the power of the presidency with a skill not seen since Lyndon Johnson’s day. 
3. Out the window went the textbooks that had concluded, largely on the basis of the stalemated 1970s, that this office had been eclipsed by a powerful, uncontrollable Congress.

IV. Reagan Renews the Cold War

1. Reagan took a get-tough stance against the USSR, especially when they continued to invade Afghanistan, and his plan to defeat the Soviets was to wage a super-expensive arms race that would eventually force the Soviets into bankruptcy and render them powerless.
   • He began this with his Strategic Defense Initiative (SDI), popularly known as “Star Wars,” which proposed a system of lasers that could fire from space and destroy any nuclear weapons fired by Moscow before they hit America—a system that many experts considered impossible as well as upsetting to the “balance of terror” (don’t fire for fear of retaliation) that had kept nuclear war from being unleashed all these years. SDI was never built.
2. Late in 1981, the Soviets clamped down on Poland’s massive union called “Solidarity” and received economic sanctions from the U.S.
   • The deaths of three different aging Soviet oligarchs from 1982-85 and the breaking of all arms-control negotiations in 1983 further complicated dealings with the Soviets.

V. Troubles Abroad

1. Israel invaded Lebanon in 1982 to destroy guerilla bases, and the next year, Reagan sent U.S. forces as part of an international peace-keeping force. But, when a suicide bomber crashed a bomb-filled truck into U.S. Marine barracks on October 23, 1983 killing over 200 marines, Reagan had to withdraw the troops, though he miraculously suffered no political damage.
   • Afterwards, he became known as the “Teflon president,” the president to which nothing harmful would stick.
2. Reagan accused Nicaraguan “Sandinistas,” a group of leftists that had taken over the Nicaraguan government, of turning the country into a forward base from which Communist forces could invade and conquer all of Latin America.
   • He also accused them of helping revolutionary forces in El Salvador, where violence had reigned since 1979, and Reagan then helped “contra” rebels in Nicaragua fight against the Sandinistas.
   • In October 1983, Reagan sent troops to Grenada, where a military coup had killed the prime minister and brought communists to power. The U.S. crushed the communist rebels.

VI. Round Two for Reagan

1. Reagan was opposed by Democrat Walter Mondale and V.P. candidate Geraldine Ferraro, the first woman to appear on a major-party presidential ticket, but won handily.
2. Foreign policy issues dominated Reagan’s second term, one that saw the rise of Mikhail Gorbachev, a personable, energetic leader who announced two new Soviet policies: glasnost, or “openness,” which aimed to introduce free speech and political liberty to the Soviet Union, and perestroika, or “restructuring,” which meant that the Soviets would move toward adopting free-market economies similar to those in the West.
3. At a summit meeting at Geneva in 1985, Gorbachev introduced the idea of ceasing the deployment of intermediate-range nuclear forces (INF). At a second meeting at Reykjavik, Iceland, in November 1985, there was stalemate. At the third one in Washington D.C., the treaty was finally signed, banning all INF’s from Europe.
   • The final summit at Moscow saw Reagan warmly praising the Soviet chief for trying to end the Cold War.
4. Also, Reagan supported Corazon Aquino’s ousting of Filipino dictator, Ferdinand Marcos.
5. He also ordered a lightning raid on Libya, in 1986, in retaliation for Libya’s state-sponsored terrorist attacks, and began escorting oil tankers through the Persian Gulf during the Iran—Iraq War.

VII. The Iran-Contra Imbroglio

1. In November 1986, it was revealed that a year before, American diplomats led by Col. Olive North had secretly arranged arms sales to Iranian diplomats in return for the release of American hostages (at least one was) and had used that money to aid Nicaraguan contra rebels.
• This brazenly violated the congressional ban on helping Nicaraguan rebels, not to mention Reagan’s personal vow not to negotiate with terrorists.
• An investigation concluded that even if Reagan had no knowledge of such events, as he claimed, he should have. This scandal not only cast a dark cloud over Reagan’s foreign policy success, but also brought out a picture of Reagan as a somewhat senile old man who slept through important cabinet meetings.
• Two foreign-policy problems seemed insoluble to Reagan: the continuing captivity of a number of American hostages, seized by Muslim extremist groups in bleeding, battered Lebanon; and the continuing grip on power of the left-wing Sandinista government in Nicaragua.

VIII. Reagan's Economic Legacy

                    Ronald Reagan had taken office vowing to invigorate the American economy by rolling back government regulations, lowering taxes, and balancing the budget. He did ease many regulatory rules, and he pushed major tax reform bills through Congress in 1981 and 1986. But a balanced budget remained grotesquely out of reach. Supply-side economic theory had promised that lower taxes would actually increase government revenue because they would so stimulate the economy as a whole. But in fact the combination of tax reduction and huge increases in
military spending opened a vast “revenue hole” of $200 billion annual deficits. In his eight years in
office, President Reagan added nearly $2 trillion to the national debt—more than all of his predecessors combined, including those who had fought protracted global wars.

• Yet another legacy of the 1980s was a sharp reversal of a long-term trend toward a more equitable distribution of income and an increasing squeeze on the middle class. In the early 1990s, median household income (in 1993 dollars) actually declined, from about $33,500 in 1989 to about $31,000 in 1993. Whether that disturbing trend should be attributed to Reagan’s policies or to more deeply running economic currents remained controversial.

IX. The Religious Right

2. Religion pervaded American politics in the 1980s.
3. Especially conspicuous was a coalition of conservative, evangelical Christians known as the religious right. In 1979 the Reverend Jerry Falwell, an evangelical minister from Lynchburg, Virginia, founded a political organization called the Moral Majority. Falwell preached with great success against sexual permissiveness, abortion, feminism, and the spread ofgay rights. In its first two years, the Moral Majority registered between 2 million and 3 million voters.
4. Using radio, direct-mail marketing, and cable TV, “televangelists” reached huge audiences in the 1980s, collected millions of dollars, and became aggressive political advocates of conservative causes.
5. Beginning in the 1980s, energized religious conservatives began to exert their political muscle in a cultural war.
   • Rev. Jerry Falwell started the Moral Majority, consisting of evangelical Christians.
   • 2-3 million registered as Moral Majority voters in its first two years.
   • Using the power of media, they opposed sexual permissiveness, abortion, feminism, and homosexuality.
6. In large part, the conservative movement of the 80s was an answer to the liberal movement of the 60s. The pendulum was swinging back.
   • Conservatives viewed America as being hijacked in the 60s by a minority of radicals with political aims; the conservatives saw themselves as taking back America.

X. Conservatism in the Courts

1. Reagan used the courts as his instrument against affirmative action and abortion, and by 1988, the year he left office, he had appointed a near-majority of all sitting federal judges.
   • Included among those were three conservative-minded judges, one of which was Sandra Day O’Connor, a brilliant Stanford Law School graduate and the first female Supreme Court justice in American history.
2. In a 1984 case involving Memphis firefighters, the Court ruled that union rules about job seniority could outweigh affirmative-action concerns.
3. In Ward’s Cove Packing v. Arizona and Martin v. Wilks, the Court ruled it more difficult to prove that an employer practiced discrimination in hiring and made it easier for white males to argue that they were victims of reverse-discrimination.
4. The 1973 case of Roe v. Wade had basically legalized abortion, but the 1989 case of Webster v. Reproductive Health Services seriously compromised protection of abortion rights.
   • In Planned Parenthood v. Casey (1992), the Court ruled that states could restrict access to abortion as long as they didn’t place an “undue burden” on the woman.

XI. Referendum on Reaganism in 1988

1. Democrats got back the Senate in 1986 and sought to harm Reagan with the Iran-Contra scandal and unethical behavior that tainted an oddly large number of Reagan’s cabinet.
   • They even rejected Robert Bork, Reagan’s ultraconservative choice to fill an empty space on the Supreme Court.
2. The federal budget and the international trade deficit continued to soar while falling oil prices hurt housing values in the Southwest and damaged savings-and-loans institutions, forcing Reagan to order a $500 million rescue operation for the S&L institutions.
   • On October 19, 1987, the stock market fell 508 points, sparking fears of the end of the money culture, but this was premature.
3. In 1988, Gary Hart tried to get the Democratic nomination but had to drop out due to a sexual misconduct charge while Jesse Jackson assembled a “rainbow coalition” in hopes of becoming president. But, the Democrats finally chose Michael Dukakis, who lost badly to Republican candidate and Reagan’s vice president George Herbert Walker Bush, 112 to 426.

XII. George H. W. Bush and the End of the Cold War

1. Bush had been born into a rich family, but he was committed to public service and vowed to sculpt “a kindler, gentler America.”
2. In 1989, it seemed that Democracy was reviving in previously Communist hot-spots.
   • In China, thousands of democratic-seeking students protested in Tiananmen Square but they were brutally crushed by Chinese tanks and armed forces.
   • In Eastern Europe, Communist regimes fell in Poland (which saw Solidarity rise again), Hungary, Czechoslovakia, East Germany, and Romania.
     • Soon afterwards, the Berlin Wall came tumbling down.
   • In 1990, Boris Yeltsin stopped a military coup that tried to dislodge Gorbachev, then took over Russia when the Soviet Union fell and disintegrated into the Commonwealth of Independent States, of which Russia was the largest member. Thus, the Cold War was over.
     • This shocked experts who had predicted that the Cold War could only end violently.
3. Problems remained however, as the question remained of who would take over the U.S.S.R.’s nuclear stockpiles or its seat in the U.N. Security Council? Eventually, Russia did.
4. In 1993, Bush signed the START II accord with Yeltsin, pledging both nations to reduce their long-range nuclear arsenals by two-thirds within ten years.
   • Trouble was still present when the Chechnyen minority in Russia tried to declare independence and was resisted by Russia; that incident hasn’t been resolved yet.
5. Europe found itself quite unstable when the economically weak former communist countries re-integrated with it.
6. America then had no rival to guard against, and it was possible that it would revert back to its isolationist policies. Also, military spending had soaked up so much money that upon the end of the Cold War, the Pentagon closed 34 military bases, canceled a $52 billion order for a navy attack plane, and forced scores of Californian defense plants to shut their doors.
7. However, in 1990, South Africa freed Nelson Mandela, and he was elected president 4 years later.
   1. Free elections removed the Sandinistas in Nicaragua in 1990, and in 1992, peace came to Ecuador at last.

XIII. The Persian Gulf Crisis

1. On August 2, 1990, Iraqi leader Saddam Hussein invaded oil-rich Kuwait with 100,000 men, hoping to annex it as a 19th province and use its oil fields to replenish debts incurred during the Iraq—Iran War, a war which oddly saw the U.S. supporting Hussein despite his bad reputation.
2. Saddam attacked swiftly, but the U.N. responded just as swiftly, placing economic embargoes on the aggressor and preparing for military punishment.
3. Fighting “Operation Desert Storm”
   • Some 539,000 U.S. military force members joined 270,000 troops from 28 other countries to attack Iraq in a war, which began on January 12, 1991, when Congress declared it.
     • On January 16, the U.S. and U.N. unleashed a hellish air war against Iraq for 37 days.
     • Iraq responded by launching several ultimately ineffective “scud” missiles at Saudi Arabia and Israel, but it had far darker strategies available, such as biological and chemical weapons and strong desert fortifications with oil-filled moats that could be lit afire if the enemy got too close.
   • American General Norman Schwarzkopf took nothing for granted, strategizing to suffocate Iraqis with an onslaught of air bombing raids and then rush them with troops.
     • On February 23, “Operation Desert Storm” began with an overwhelming land attack that lasted four days, saw really little casualties, and ended with Saddam’s forces surrender.
     • American cheered the war’s rapid end and well-fought duration and was relieved that this had not turned into another Vietnam, but Saddam Hussein had failed to be dislodged from power and was left to menace the world another day.
4. The U.S. found itself even more deeply ensnared in the region’s web of mortal hatreds.

XIV. Bush on the Home Front

1. President Bush’s 1990 Americans with Disabilities Act was a landmark law that banned discrimination against citizens with disabilities.
2. Bush also signed a major water projects bill in 1992 and agreed to sign a watered-down civil rights bill in 1991.
3. In 1991, Bush proposed Clarence Thomas (a Black man) to fill in the vacant seat left by retiring Thurgood Marshall (the first Black Supreme Court justice), but this choice was opposed by the NAACP since Thomas was a conservative and by the National Organization for Women (NOW), since Thomas was supposedly pro-abortion.
   • In early October 1991, Anita Hill charged Thomas with sexual harassment, and even though Thomas was still selected to be on the Court, Hill’s case publicized sexual harassment and tightened tolerance of it (Oregon’s Senator Robert Packwood had to step down in 1995 after a case of sexual harassment).
   • A gender gap arose between women in both parties.
4. In 1992, the economy stalled, and Bush was forced to break an explicit campaign promise (“Read my lips, no new taxes”) and add $133 billion worth of new taxes to try to curb the $250 billion annual budget.
   • When it was revealed that many House members had written bad checks from a private House “bank,” public confidence lessened even more.
5. The 27th Amendment banned congressional pay raises from taking effect until an election had seated a new session of Congress, an idea first proposed by James Madison in 1789.

Chapter 32: The politics of boom and Bust

I. The Republican “Old Guard” Returns

1. Newly elected President Warren G. Harding was tall, handsome, and
   popular, but he had a mediocre mind and he did not like to hurt
   people’s feelings.
   • Nor could he detect the corruption within his adminstration.
2. His cabinet did have some good officials, though, such as Secretary
   of State Charles Evans Hughes, who was masterful, imperious, incisive,
   and brilliant, Secretary of Commerce Herbert Hoover, and Secretary of
   the Treasury Andrew W. Mellon.
3. However, people like Senator Albert B. Fall of New Mexico, a
   scheming anti-conservationist, became secretary of the interior, and
   Harry M. Daugherty took over the reigns as attorney general.
   • These two became the worst of the scandalous cabinet members.

II. GOP Reaction at the Throttle

1. A good man but a weak one, Harding was the perfect front for
   old-fashioned politicians to set up for the nation a McKinley-style old
   order.
   • It hoped to further laissez-faire capitalism, and one of the
     examples of this was the Supreme Court, where Harding appointed four of
     the nine justices, including William H. Taft, former president of the
     United States.
2. In the early 1920s, the Supreme Court killed a federal child-labor law.
   • In the case of Adkins v. Children’s Hospital, the court
     reversed its ruling in the Muller v. Oregon case by invalidating a
     minimum wage law for women.
3. Under Harding, corporations could expand again, and anti-trust laws were not as enforced or downright ignored.
4. Men sympathetic to railroads headed the Interstate Commerce Commission.

III. The Aftermath of the War

1. Wartime government controls disappeared (i.e. the dismantling of
   the War Industries Board) and Washington returned control of railroads
   to private hands by the Esch-Cummins Transportation Act of 1920.
2. The Merchant Marine Act of 1920 authorized the Shipping Board,
   which controlled about 1,500 vessels, to get rid of a lot of ships at
   bargain prices, thus reducing the size of the navy.
   • Labor lost much of its power, as a strike was ruthlessly broken in
     1919, and the Railway Labor Board ordered a wage cut of 12% in 1922.
   • Labor membership shrank by 30% from 1920 to 1930.
3. In 1921, the Veterans’ Bureau was created to operate hospitals and provide vocational rehabilitation for the disabled.
   • Many veterans wanted the monetary compensation promised to them for their services in the war.
   • The Adjusted Compensation Act gave every former soldier a paid-up
     insurance policy due in twenty years. It was passed by Congress twice
     (the second time to override president Calvin Coolidge’s veto).

IV. America Seeks Benefits Without Burdens

1. Since America had never ratified the Treaty of Versailles, it was
   still technically at war with Germany, so in July of 1921, it passed a
   simple joint resolution ending the war.
2. The U.S. did not cooperate much with the League of Nations, but
   eventually, “unofficial observers” did participate in
   conferences. The lack of real participation though from the U.S. proved
   to doom the League.
3. In the Middle East, Secretary Hughes secured for American oil
   companies the right to share in the exploitation of the oil riches
   there.
4. Disarmament was another problem for Harding and he had to watch the
   actions of Japan and Britain for any possible hostile activities.
5. America also went on a “ship-scrapping” bonanza.
   • The Washington “Disarmament” Conference of 1921-22
     resulted in a plan that kept a 5:5:3 ratio of ships that could be held
     by the U.S., Britain, and Japan (in that order). This surprised many
     delegates at the conference (notably, the Soviet Union, which was not
     recognized by the U.S., was not invited and did not attend).
   • The Five-Power Naval Treaty of 1922 embodied Hughes’s ideas on ship ratios, but only after Japanese received compensation.
   • A Four-Power Treaty, which bound Britain, Japan, France, and the
     U.S. to preserve the status quo in the Pacific, replaced the
     20-year-old Anglo-Japanese Alliance.
   • The Nine-Power Treaty of 1922 kept the open door open in China.
   • However, despite all this apparent action, there were no limits
     placed on small ships, and Congress only approved the Four-Power Treaty
     on the condition that the U.S. was not bound, thus effectively
     rendering that treaty useless.
6. Frank B. Kellogg, Calvin Coolidge’s Secretary of State, won
   the Nobel Peace Prize for his role in the Kellog-Briand Pact (Pact of
   Paris), which said that all nations that signed would no longer use war
   as offensive means.

V. Hiking the Tariff Higher

1. Businessmen did not want Europe flooding American markets with
   cheap goods after the war, so Congress passed the Fordney-McCumber
   Tariff Law, which raised the tariff from 27% to 35%.
   • Presidents Harding and Coolidge, granted with authority to reduce
     or increase duties, and always sympathetic towards big industry, were
     much more prone to increasing tariffs than decreasing them.
2. However, this presented a problem: Europe needed to sell goods to
   the U.S. in order to get the money to pay back its debts, and when it
   could not sell, it could not repay.

VI. The Stench of Scandal

1. However, scandal rocked the Harding administration in 1923 when
   Charles R. Forbes was caught with his hand in the money bag and
   resigned as the head of the Veterans’ Bureau.
   • He and his accomplices looted the government for over $200 million.
2. The Teapot Dome Scandal was the most shocking of all.
   • Albert B. Fall leased land in Teapot Dome, Wyoming, and Elk Hills,
     California, to oilmen Harry F. Sinclair and Edward L. Doheny, but not
     until Fall had received a “loan” (actually a bribe) of
     $100,000 from Doheny and about three times that amount from Sinclair.
3. There were reports as to the underhanded doings of Attorney General
   Harry Daugherty, in which he was accused of the illegal sale of pardons
   and liquor permits.
4. President Harding, however, died in San Francisco on August 2,
   1923, of pneumonia and thrombosis, and he didn’t have to live
   through much of the uproar of the scandal.

VII. “Silent Cal” Coolidge

1. New president Calvin Coolidge was serious, calm, and never spoke more than he needed to.
2. A very morally clean person, he was not touched by the Harding
   scandals, and he proved to be a bright figure in the Republican Party.
   • It was ironic that in the Twenties, the “Age of
     Ballyhoo” or the “Jazz Age,” the U.S. had a very
     traditional, old-timey, and some would say boring president.

VIII. Frustrated Farmers

1. World War I had given the farmers prosperity, as they’d produced much food for the soldiers.
   • New technology in farming, such as the gasoline-engine tractor, had increased farm production dramatically.
   • However, after the war, these products weren’t needed, and the farmers fell into poverty.
2. Farmers looked for relief, and the Capper-Volstead Act, which
   exempted farmers’ marketing cooperatives from antitrust
   prosecution, and the McNary-Haugen Bill, which sought to keep
   agricultural prices high by authorizing the government to buy up
   surpluses and sell them abroad, helped a little.
   • However, Coolidge vetoed the second bill, twice.

IX. A Three-Way Race for the White House in 1924

1. Coolidge was chosen by the Republicans again in 1924, while
   Democrats nominated John W. Davis after 102 ballots in Madison Square
   Garden.
   • The Democrats also voted by one vote NOT to condemn the Ku Klux Klan.
2. Senator Robert La Follette led the Progressive Party as the third party candidate.
   • He gained the endorsement of the American Federation of Labor and
     the shrinking Socialist Party, and he actually received 5 million votes.
   • However, Calvin Coolidge easily won the election.

X. Foreign-Policy Flounderings

1. Isolationism continued to reign in the Coolidge era, as the Senate
   did not allow America to adhere to the World Court, the judicial wing
   of the League of Nations.
2. In the Caribbean and Latin America, U.S. troops were withdrawn from
   the Dominican Republic in 1924, but remained in Haiti from 1914 to
   1934.
   • Coolidge took out troops from Nicaragua in 1925, and then sent them
     back the next year, and in 1926, he defused a situation with Mexico
     where the Mexicans were claiming sovereignty over oil resources.
   • However, Latin Americans began to resent the American dominance of them.
3. The European debt to America also proved tricky.

XI. Unraveling the Debt Knot

1. Because America demanded that Britain and France pay their debts,
   those two nations placed huge reparation payments on Germany, which
   then, to pay them, printed out loads of paper money that caused
   inflation to soar.
   • At one point in October of 1923, a loaf of bread cost 480 million German marks.
2. Finally, in 1924, Charles Dawes engineered the Dawes Plan, which
   rescheduled German reparations payments and gave the way for further
   American private loans to Germany.
   • Essentially, the payments were a huge circle from the U.S. to
     Germany to Britain/France and back to the U.S. All told, the Americans
     never really gained any money or got repaid in genuine.
   • Also, the U.S. gained bitter enemies in France and Britain who were
     angry over America’s apparent greed and careless nature for
     others.

XII. The Triumph of Herbert Hoover, 1928

1. In 1928, Calvin Coolidge said, “I do not choose to
   run,” and his logical successor immediately became economics
   genius Herbert Hoover. Hoover spoke of “Rugged
   Individualism” which was his view that America was made great by
   strong, self-sufficient individuals, like the pioneers of old days
   trekking across the prairies, relying on no one else for help. This was
   the kind of folk America still needed, he said.
   • Hoover was opposed by New York governor Alfred E. Smith, a man who
     was blanketed by scandal (he drank during a Prohibitionist era and was
     hindered politically by being a Roman Catholic).
2. Radio turned out to be an important factor in the campaign, and
   Hoover’s personality sparkled on this new medium (compared to
   Smith, who sounded stupid and boyish).
3. Hoover had never been elected to public office before, but he had
   made his way up from poverty to prosperity, and believed that other
   people could do so as well.
4. There was, once again, below-the-belt hitting on both sides, as the
   campaign took an ugly turn, but Hoover triumphed in a landslide, with
   444 electoral votes to Smith’s 87.

XIII. President Hoover’s First Moves

1. Hoover’s Agricultural Marketing Act, passed in June of 1929,
   was designed to help the farmers help themselves, and it set up a
   Federal Farm Board to help the farmers.
   • In 1930, the Farm Board created the Grain Stabilization Corporation
     and the Cotton Stabilization Corporation to bolster sagging prices by
     buying surpluses.
2. The Hawley-Smoot Tariff of 1930 raised the tariff to an unbelievable 60%!
   • Foreigners hated this tariff that reversed a promising worldwide
     trend toward reasonable tariffs and widened the yawning trade gaps.

XIV. The Great Crash Ends the Golden Twenties

1. Hoover confidently predicted an end to poverty very soon, but on
   October 29, 1929, a devastating stock market crash caused by
   over-speculation and overly high stock prices built only upon
   non-existent credit struck the nation.
   • Losses, even blue-chip securities, were unbelievable as by the end
     of 1929, stockholders had lost over $40 million in paper values (more
     than the cost of World War I)!
   • By the end of 1930, 4 million Americans were jobless, and two years later, that number shot up to 12 million.
   • Over 5,000 banks collapsed in the first three years of the Great Depression.
   • Lines formed at soup kitchens and at homeless shelters.

XV. Hooked on the Horn of Plenty

1. The Great Depression might have been caused by an overabundance of
   farm products and factory products. The nation’s capacity to
   produce goods had clearly outrun its capacity to consume or pay for
   them.
2. Also, an over-expansion of credit created unsound faith in money, which is never good for business.
3. Britain and France’s situations, which had never fully recovered from World War I, worsened.
4. In 1930, a terrible drought scorched the Mississippi Valley and thousands of farms were sold to pay for debts.
5. By 1930, the depression was a national crisis, and hard-working
   workers had nowhere to work, thus, people turned bitter and also turned
   on Hoover.

*Villages of shanties and ragged shacks were called Hoovervilles and
were inhabited by the people who had lost their jobs. They popped up
everywhere.

XVI. Rugged Times for Rugged Individualists

1. Hoover unfairly received the brunt of the blame for the Great
   Depression, but he also did not pass measures that could have made the
   depression less severe than it could have been.
   • Critics noted that he could feed millions in Belgium (after World War I) but not millions at home in America.
2. He did not believe in government tampering with the economic
   machine and thus moving away from laissez faire, and he felt that
   depressions like this were simply parts of the natural economic
   process, known as the business cycle.
   • However, by the end of his term, he had started to take steps for the government to help the people.

XVII. Hoover Battles the Great Depression

1. Finally, Hoover voted to withdraw $2.25 billion to start projects to alleviate the suffering of the depression.
   • The Hoover Dam of the Colorado River was one such project.
2. The Muscle Shoals Bill, which was designed to dam the Tennessee
   River and was ultimately embraced by the Tennessee Valley Authority,
   was vetoed by Hoover.
3. Early in 1932, Congress, responding to Hoover’s appeal,
   established the Reconstruction Finance Corporation (RFC), which became
   a government lending bank. This was a large step for Hoover away from
   laissez faire policies and toward policies the Democrats (FDR) would
   later employ.
   • However, giant corporations were the ones that benefited most from
     this, and the RFC was another one of the targets of Hoover’s
     critics.
4. In 1932, Congress passed the Norris-La Guardia Anti-Injection Act,
   which outlawed anti-union contracts and forbade the federal courts to
   issue injunctions to restrain strikes, boycotts, and peaceful picketing
   (this was good for unions).
5. Remember, that in past depressions, the American public was often
   forced to “sweat it out,” not wait for government help. The
   trend was changing at this point, forced to do so by the Depression.

XVIII. Routing the Bonus Army in Washington

1. Many veterans, whom had not been paid their compensation for WWI, marched to Washington, D.C. to demand their entire bonus.
   • The “Bonus Expeditionary Force” erected unsanitary
     camps and shacks in vacant lots, creating health hazards and annoyance.
   • Riots followed after troops came in to intervene (after Congress tried to pass a bonus bill but failed), and many people died.
   • Hoover falsely charged that the force was led by riffraff and reds
     (communists), and the American opinion turned even more against him.

XIX. Japanese Militarists Attack China

1. In September 1931, Japan, alleging provocation, invaded Manchuria and shut the Open Door.
2. Peaceful peoples were stunned, as this was a flagrant violation of
   the League of Nations covenant, and a meeting in Geneva, Switzerland,
   was arranged.
3. An American actually attended, but instead of driving Japan out of
   China, the meeting drove Japan out of the League, thus weakening it
   further.
4. Secretary of State Henry Stimson did indicate that the U.S.
   probably would not interfere with a League of Nations embargo on Japan,
   but he was later restrained from taking action.
   • Since the U.S. took no effective action, the Japanese bombed
     Shanghai in 1932, and even then, outraged Americans didn’t do
     much to change the Japanese minds.
   • The U.S.’s lackluster actions support the notion that America’s isolationist policy was well entrenched.

XX. Hoover Pioneers the Good Neighbor Policy

1. Hoover was deeply interested in relations south of the border, and
   during his term, U.S. relations with Latin America and the Caribbean
   improved greatly.
   • Since the U.S. had less money to spend, it was unable to dominate
     Latin America as much, and later, Franklin D. Roosevelt would build
     upon these policies.