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The First Bush Presidency Previous Next
Digital History ID 3372


In the 1988 presidential campaign, the Republican candidate, Vice President George Bush, was said to have the best resume in Washington. Bush won the Distinguished Service Cross during World War II, made a fortune in the Texas oil business, and then, went to Washington where he served as a Congressman, ambassador to the United Nations, envoy to China, and director of the CIA. His Democratic opponent, Massachusetts Governor Michael Dukakis, was a serious, hardworking son of Greek immigrants.

Mudslinging and personal invective are nothing new in American politics, but the 1988 campaign was unusually vacuous and cynical. Real differences between the candidates were submerged in a battle over character, abortion, prison furloughs, school prayer, and patriotism. The campaign dramatized a development that had been reshaping American politics since the late 1960s: the growing power of media consultants and pollsters, who marketed candidates by emphasizing imagery and symbolism. At the end of a race that saw both candidates use negative campaigning, Bush was elected the 41st president of the United States with 56 percent of the popular vote.

A Kinder, Gentler Nation

In his inaugural address, Bush signaled a departure from the avarice and greed of the Reagan era by calling for a "new engagement in the lives of others." He promised to be more of a "hands on" administrator than his predecessor, and he committed his presidency to creating a "kinder, gentler" nation, more sensitive and caring to the poor and disadvantaged.

During his first years in office, President Bush and the Democratic-controlled Congress addressed many issues ignored during the Reagan years. For the first time in eight years, the minimum wage was raised from $3.35 to $4.25 an hour. Congress amended federal air pollution laws in order to reduce noxious emissions and acid rain. For the first time since 1971, Congress considered child-care legislation, and ultimately, voted to provide subsidies to low-income families to defray the costs of childcare. In other actions, Congress prohibited job discrimination against the disabled, required nutrition labeling on processed foods, and expanded immigration into the United States.

In two areas, critics accused President Bush of reneging on his promise of a "kinder, gentler" nation. He vetoed a new civil rights bill bolstering protections for minorities and women against job discrimination on the grounds that it would lead to quotas. Bush also vetoed a bill that would have provided up to six months of unpaid family leave for workers with newly born or adopted children or for emergencies. In November 1991, however, Bush signed a compromise, the Civil Rights Act, which made it easier for workers to win anti-discrimination lawsuits.

Economic Policy

Many Americans believed that the end of the Cold War would bring a huge peace dividend, which could be used to reduce the federal budget deficit and fund domestic social programs. Soon after Bush took office, however, Americans learned that much of the peace dividend would have to be spent to clean up nuclear wastes produced at federal facilities and to bail out the nation's troubled savings and loan industry.

The roots of the savings and loan crisis were planted during the presidency of Jimmy Carter. High inflation and high interest rates threatened to bankrupt those savings institutions that could not compete with other financial institutions permitted to pay high interest rates. A 1980 law lifted limits on the interest rates that savings institutions could pay and allowed them to make a limited amount of investments in commercial real estate. In 1982 and 1983, Congress broadened the banking industry's capacity to make unsecured commercial loans and investments in commercial real estate.

The savings and loan industry's problems began in the mid-1980s. Falling oil prices led to a collapse of land values, especially in the Southwest, creating huge losses for institutions that had invested in real estate. By the end of the decade, these institutions began to fail in large numbers. The mounting bills for the savings and loan bailout propelled President Bush in 1990 to violate his 1988 "no new taxes" campaign pledge.

Foreign Policy

The first important foreign policy act of the Bush administration was an invasion of Panama, which the Pentagon called Operation Just Cause. The origins of the conflict stretched back to 1987 when a high Panamanian military official accused strongman General Manuel Antonio Noriega of committing fraud in the 1984 presidential election and of drug trafficking.

Violent street demonstrations broke out in Panama as angry Panamanians called for Noriega's overthrow. Noriega responded by declaring a state of emergency. The crisis escalated when two Florida grand juries indicted the general on charges that he protected and assisted the Colombian drug cartel.

U.S.-Panamanian relations deteriorated further when Noriega voided results of the 1989 presidential election and sent paramilitary forces into the streets of Panama City, where they beat up opposition candidates. Conflict grew imminent when Noriega declared his country in a "state of war" against the United States. A day later, four unarmed American military personnel were fired on at a roadblock by Panamanian troops, and one American was killed. Bush dispatched a force of 10,000 troops to safeguard the lives of Americans and to protect the integrity of the Panama Canal treaties. Between 300 and 800 Panamanian civilians and military personnel died during the invasion; there were 23 American casualties. Noriega was forced out of power and deported to the United States to stand trial for drug trafficking.

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