UNITED STATES OF AMERICA
Republican Senators, including John Danforth of Missouri and H. John Heinz III of Pennsylvania, call for a surcharge on Japanese imports to the United States, threatening to “raise the prices of Toyotas and Toshibas” in order to force Tokyo to open its markets to US-made electronics, pharmaceuticals, medical and telecommunications equipment, and forestry products. The Administration has claimed that it is Tokyo’s barriers to trade which are producing the unparalleled trade deficit in the United States.
US Labor Secretary, Raymond Donovan, is indicted for $186 million in fraud and is forced to resign. Replaced by Bill Brock, Donovan is the first member of the Reagan White House to face charges over his activities. Shortly after the end of the Administration in April, 1987, Donovan will be exonerated.
US economic figures confirm ongoing stable inflation, but predict sluggish economic growth and show a rising current account deficit for the last quarter of 1984. For the first time in seventy years, the United States has become a debtor nation, creating great concern among policy makers in Washington for whom this is a brave new world.
Governor Richard Celeste begins re-opening nearly seventy Ohio savings banks after calling an extended bank holiday due to a crisis of confidence. The crisis, which began with the $4.5 billion bailout of Continental Illinois National Bank and Trust Company during July, 1984, has spread to include bad loans and management scandals right across the sector. Confidence in the US banking system will remain low.
US Federal Reserve Vice Chairman, Preston Martin, warns that GDP growth has fallen to 1.3% over the March quarter and that unemployment can be expected to rise. He warns the Administration of the need to boost real growth and cut budgetary allocations. President Reagan states that there is no need for concern or policy change.
US Senator Danforth Quayle (R-IN) admits that the budget reforms of the President are “becoming unraveled” in the world’s largest economy. Senate Majority Leader Bob Dole (R-KS) states that he does not believe the proposed budget has failed as yet.
There is short selling on E.F. Hutton, one of Wall Street’s most prestigious brokerage firms, in what appears to be an attack on the company after its chairman was convicted of monstrous fraud. Its commercial paper is downgraded and panic sets into the market as it appears that Hutton may not be able to meet its margin calls. By day’s end, President Reagan and Treasury Secretary James Baker have approached Citicorp to ask for its assistance in taking over the group. 12 May
US Defence Secretary Caspar Weinberger announces that the Pentagon will not proceed with purchases of the Northrop F-20 Tigershark, wiping out the profit margins of Northrop Corporation for the year. Instead, there is an agreement to purchase an additional seventy F-15 Eagles and work will be accelerated on the USS Abraham Lincoln, bringing forward the launch date of the vessel until early 1987.
US Defence Secretary Caspar Weinberger admits that the White House has failed to convince Congress to continue its support of key military programs. He confirms the death of the self-propelled anti-aircraft weapon, the DIVAD, and the AIM-120 AMRAAM missile programs in response to Congressional demands for an end to the military build-up. In the end, Congress will allow only a “zero growth” option for military spending in this year’s budget.
US President Ronald Reagan releases his plans for a tax reform package and wins strong bipartisan support. Strong endorsements are received from Senator Bill Bradley (D-NJ), Representative Richard Gephardt (D-MO), Senator Bob Kasten (R-WI) and Representative Jack Kemp (R-NY). There is general agreement that Congress will pass a tax reform bill this sitting.
The financial instability in US markets spreads from Ohio to Maryland, with more banking institutions admitting to trouble. The Chairman of Chase Manhattan Bank, Willard Butcher, says that there is the potential for a serious economic crisis, citing that $630 million has been withdrawn from Maryland banks over the past two months. The Governor of Maryland, Harry R Hughes, orders that the failing banks should be brought under state control and the assets sold off.
As the new Reagan budget reaches Congress, the US President is seen to have backed down to special interest groups. Senator Bill Bradley (D-NJ) warns that the special benefits and complexities in the budget may kill any attempt at tax reform, while the House Ways and Means Committee criticises the President for giving in to oil interests.
The frontrunner for the Democratic nomination for president in 1988, New York Governor Mario Cuomo, makes a verbal slip condemning, and enraging, the gun lobby.
New York Governor Mario Cuomo and Mayor Tom Bradley of Los Angeles announce that government pension funds will divest $8 billion currently held in South African assets. To help fund managers avoid sudden losses, it is agreed that divestment will occur over a period of four years.
After a series of setbacks in which it appears that defence will be cut and Social Security increases restored by the Congress, US President Ronald Reagan goes into a highly visible and offensive campaign to convince the Congress to pass tax reform legislation. He has privately expressed the belief that the passage of the legislation will lead to a massive boost for the Republican Party and make it the natural party of government. Leon Panetta (CA-D) states that the tax legislation sells out to special interests, but Treasury Secretary James Baker states that, without some concessions to special interests, the budgetary proposals would not have made it through Cabinet, let alone Congress. Congressman Jack Kemp (NY-R) criticises the plan for not going far enough, calling for a lower top rate with a maximum of 30%.
General Motors moves into the aerospace industry, with its $5.2 billion purchase of Hughes Aircraft. They have outbid a consortium headed by Ford Motor Company and Boeing.
Admiral Rickover of the US Navy admits that he has taken nearly $70,000 in gifts from one of the Navy’s principal contractors, General Dynamics. The company will be fined $675,000 for giving illegal gratuities to a number of Administration officials.
After an attack by White House Communications Director Patrick Buchanan, New York Governor Mario Cuomo comes out against the Reagan tax plan. The conflict between the two, while giving Cuomo a lot of headline space, antagonises fellow members of the Democratic Party.
The Chairman of the US Federal Reserve, Paul Volker, warns that US foreign debt has risen by $722 billion in the last twelve months and that this is “faster than is consistent with the long-run health of the economy”. He admits that debt has been a great stimulus to the economy and facilitated half a decade of economic growth, but mortgage delinquency is now at 6.2%, the highest level since records began in the 1940’s. He states that government spending is putting upward pressure on interest rates.
Former quarterback for the Buffalo Bills, Congressman Jack Kemp (NY-R) makes a visit to Iowa and Michigan, indicating that he intends to contest the Republican nomination at the 1988 presidential election. During discussions with voters, he is seen to question the intelligence of US President Ronald Reagan and states that Vice President George Bush may be the frontrunner for the nomination, but has no clear message for the electorate.
The US Administration announces the selection of new locations for extra Navy funding. The major winners are Corpus Christi (Texas), Pensacola (Florida), Mobile (Alabama) and San Francisco (California). Senator Lloyd Bentsen (R-TX) states that the deal will bring over $100 million into his state’s coffers.
US President Ronald Reagan is confirmed to be undergoing unexpected surgery at Bethesda Naval Hospital after a large growth is discovered in his colon. He hands power over to Vice President George Bush under the 25th Amendment to allow for post-operative recuperation. The electorate is concerned that this is Reagan’s third surgery since his 1980 election and hope that the President will soon recover.
David Stockman, Director of the US Office of Management and Budget, quits his position with the administration for a position at Saloman Brothers, a Wall Street investment house. Despite having had the budget deficit quadruple under his watch, Stockman has considerable bipartisan respect, and his parting shot at the dictatorial nature of the White House Chief of Staff, Don Regan, damages the Administration.
It is announced that the surgery of US President Ronald Reagan was to remove a cancerous growth from his bowel. The doctors say that the cancer has not reached the lymph nodes, providing a greater than fifty percent chance of his living a normal lifespan.
US President Ronald Reagan returns to work, where he learns that the “dictatorial nature” of his Chief of Staff has antagonised Vice President George Bush, National Security Advisor Robert McFarlane and Senate Majority Leader Robert Dole (R-KS).
The Chairman of BankAmerica, Samuel Armacost, announces that, between April and June, the bank lost $338 million, the second largest quarterly loss in US banking history. Most of the bad loans have been in Latin America. The announcement commences a sell-off of BankAmerica stock.
US Attorney General Edwin Meese files an amicus curiae brief, asking the Supreme Court to review its landmark 1973 decision in Roe v Wade. Given that the makeup of the Court has not changed since the decision was last challenged in 1983, the action is interpreted, even by some supporters, as a blatant political move to underpin falling support for the Administration. Rev Jerry Falwell praises the action as a demonstration that the White House is “doing all that it can do”.
In a new opinion poll taken by the US Republican National Committee, 67% of people said that they had “positive feelings” towards President Ronald Reagan. 69% say that they believe they are feeling positive in their outlook for the nation. Interestingly, the poll states that the majority of the voting populace said that the overwhelming causes of national concern were the budget and trade deficits, but only 25% believed that President Reagan could fix the problem.
As a sign of contracting credit markets, the US Federal National Mortgage Association rules that all new mortgage contracts, where the deposit is less than ten percent of the purchase price, will have exceptionally high eligibility terms. Lenders are dependent on the FNMA and the new rules reduce the amount of available credit in the market.
Congressman Denny Smith (R-OR), who recently led the campaign to stop the funding of the DIVAD air defence gun and clinched its failure when he revealed the failure of a $54 million test, calls on the Administration to move the $4.2 billion allocated to the project into a rescue package for the US banking system, where the size of the bad debts among various lending institutions has now reached an estimated $125 billion.
The US Department of Education advises that the delinquency rate on student debts has now reached over ten percent, meaning that approximately $15 billion of loan repayments, a considerable piece of revenue, will not be paid this financial year.
There is increased media commentary regarding high vacancy rates in commercial buildings and ghost-town condominium projects in the United States, indicating that the continued expansion of the construction industry cannot continue. The Treasury announces that three savings and loans institutions have succumbed to the fall in real estate prices, at a cost to the taxpayer of $6.2 billion, and Congress, fearful of the pressure caused by the budget deficit, agree to cut a quarter of the federal farm programs for the upcoming budget.
Wall Street prognosticators state concern about the recent fall in the dollar and fears that the economy may be stagnating. In the past six months, the dollar has fallen by 25% against the British pound and 10% against the Japanese yen. It is now at its lowest point in twelve months against the French franc and the West German mark. This places downward pressure on interest rates, encouraging the consumption-based recovery for which the Administration is hoping, but pushing up import costs and delivering a blow to efforts to contain the burgeoning trade deficit, now approaching $150 billion for the year.
A judicial inquiry into US conglomerate General Dynamics turns up allegations of fraud amounting to $158 million. This will go to court and, after a legal challenge, General Dynamics will settle accounts with the US government at a cost of $141 million. Nonetheless, the commencement of the ordering process for construction of the USS Kentucky (SSBN-737) will ensure the company’s continued survival.
Senator Majority Leader Robert Dole (R-KS) emerges as a contender for the Republican nomination for the 1988 Presidential elections, as he rides the budget deficit issue up against the President and calls for the Senate not to be fearful of “powerful interests”
US Senator Paul Laxalt (R-NV) announces his intention to leave the Senate at the 1986 legislative elections. Republican Party members are concerned that, despite their three-seat majority in the Senate, they must defend twenty-two seats against only twelve seats for the Democrats at the next election. The Democrats are targeting, in particular, Florida, South Dakota and Washington, but are also trying to motivate activism in New York and Pennsylvania. Two other possible retirements, in North Carolina and Maryland, make it possible that up to nine of the twenty-two Republican seats are vulnerable.
Reverend Jerry Falwell, one of the closest supporters of US President Ronald Reagan, returns from a trip to South Africa and meeting with various public figures, including President F.W. Botha and Bishop Desmond Tutu of Johannesburg. With children being detained under the state of emergency, Falwell claims that there are blacks who strongly support apartheid. He denies allegations by Winnie Mandela, wife of the imprisoned African National Congress leader, that he attempted to deliver a bribe from the US Embassy for a cooperative statement from Nelson Mandela.
US Attorney General Edwin Meese appears on ABC Television for an interview with David Brinkley. He calls for the reversal of the 1966 Miranda ruling, and states that religious groups on school campuses should receive sanctioned periods for activities. He also reveals that he has lodged claim to eliminate affirmative action programs in every jurisdiction in the United States. He is questioned over his treatment of failed brokerage house, E.F. Hutton, and his decision not to prosecute the Teamsters boss, Jackie Presser. He criticises the Senate for holding up his bench appointments.
US President Ronald Reagan spends his first full day back at the White House, after nearly two months of light duties, and resolves the dispute over application of indexation. This means a pay freeze for some two million federal civil servants. Reagan argues that the reduction in government expenditure is vital to take pressure off inflation, but pledges himself to fight to protect cost of living adjustments in Social Security. That stand will lose him support among elements of the Republican Party, who insist that Social Security cannot be quarantined from cuts. Asked to comment on South Africa, the President offers support for a “path of reformism” and suggests that the leadership “must continue to take new steps”. He denies any suggestion of the claim of disputes between Chief of Staff Don Regan and Senate Majority Leader Bob Dole.
US Federal Reserve Chairman Paul Volcker announces that he will step down from his office early in the New Year. There are two positions that will be up to fill on the Federal Reserve Board early in the New Year and new presidential appointments would lose Volcker all but nominal control of the Board. He expresses a private belief that his successors will probably fail to contain inflation.
As the US Congress reels from emerging details on weapons trading between the Reagan Administration and Iran, the General Accounting Office of Congress reveals that the Pentagon has been exaggerating cost figures on innumerable items. Wisconsin Democrat Les Aspin, chairman of the House Armed Services Committee, states that the Pentagon has defrauded the country to the cost of $38.4 billion. In light of this and the Irangate scandal, Aspin calls for the Defence Secretary, Caspar Weinberger, to resign.
The Chairman of the US House Ways and Means Committee, Congressman Dan Rostenkowski, calls upon the White House to remain “committed” to the process of achieving a presentation of a full tax package to the Congress within the next week. He leads a Democratic delegation to the White House to meet with Treasury Secretary James Baker. Among the members is Buddy Roemer (D-LA), who broaches the subject of a growing clamour for protectionist legislation to support US industries and jobs from Japanese competition.
Irangate claims its first political victim, with the resignation of US National Security Agency Director, Robert MacFarlane. The alleged dealings between the US and Iranian governments appeared to have taken place through his office and, rather than drag out a battle that could weaken confidence in the President, he agrees to step aside.
US Senate Majority Leader Bob Dole expresses uncertainty as to the future of the Reagan tax plan, arguing that no room can be made on the congressional calendar to debate it over the next fourteen months. “It’s not that we’re opposed to it,” he states, “but Congress will not now reconvene until January.”
The Economist magazine expresses a belief that the lowering of interest rates by the US Federal Reserve has been enough to avoid a recession, but express concern about the continued decline of the dollar. They believe growth in US markets has already begun to recover, with increased retail sales and a slight rise in industrial production. While the dollar will probably continue to fall, a growing unemployment rate should moderate inflation.
US House Speaker Tip O’Neill states that Congress will not rush “helter-skelter” on tax reforms and calls on the President to concentrate of farm assistance packages, the unfinished national budget and foreign trade conflicts with Japan and the European Community. He states that nobody in Congress has interest in debating tax reform during an election year.
Under intense scrutiny, US President Ronald Reagan requests new National Security Advisor, Admiral John Poindexter, to investigate the sale of US weapons to Iran. He states that NSA Director Robert MacFarlane acted without Presidential authorisation. Senate Armed Services Committee Chairman, Barry Goldwater (R-AZ), having strongly disagreed with the President’s decision, calls for the creation of a full Senate inquiry.
Media magnate Rupert Murdoch finalises his purchase of 20th Century Fox from former Denver oilman, Marvin Davis, for $325 million cash plus real estate in California and Colorado.
Congressman Patrick Swindall (R-GA) calls for tax money to be used to partially fund Congressional campaigns, stating that campaigns now cost over half a million per candidate and arguing that congressional candidates needed to provide considerable personal funding as well. To end reliance on donations, he proposes to the White House that pay funding to political parties based on their most recent political outcomes, at a rate of $0.60 per vote. This amounts to a $110 million donation to the Republican and Democratic parties for the next Presidential election, with the Republicans gaining about sixty percent of the monies. This bill will pass in 1987.
Maryland Senator Charles Mathias Jr becomes the fourth Republican member to announce his plan to retire from the US Senate. This action puts the chance of the Republican Senate majority after 1986 into even further doubt, with many suspecting that this seat will now go to a Democrat.
Recent polls confirm that US President Ronald Reagan has higher levels of support in dealing with the Soviets and controlling inflation, but is accused of being unfair, particularly towards the poor. Support since July has fallen from 67% to 59%. Statistics show few support the Reagan tax plan, most expected little future progress with the Soviets and that the most important issues are state of the economy (54%), potential for nuclear war (43%), superpower relations (42%) and AIDS (30%).
US Treasury Secretary James Baker meets with G-7 representatives in New York to agree upon a solution to the situation with the US dollar. It is hoped that a significant and concerted devaluation of the dollar will reduce the current account deficits and thus boost growth in the US economy, which is not keeping pace with population growth. He points out that recent falls in the dollar have reduced the current account deficit from $13.4 billion per month to under $10 billion. The Soviet observer, Deputy Ambassador to Washington, Vadim Zagladin, suggests that the US economy would be healthier if “US banks had not burdened traditional US markets with such debt they cannot afford to trade”.
President Reagan becomes the first sitting President to give evidence to the Tower Commission, while Defence Secretary Caspar Weinberger makes the news programs, promoting the US position on arms control for the upcoming summit which rejects a fifty percent cut in weapons.
US President, Ronald Reagan, announces the resignation of his Secretary of Health and Human Services, Margaret Heckler, who has presided over the $315 billion annual budget since 1983. It is alleged that she has struck up a position against the White House Chief of Staff, Don Regan.
US Senators Phil Gramm (R-Texas), Ernest Hollings (R-South Carolina) and Warren Rudman (R-New Hampshire) push into legislation binding restraints on federal spending and, for the first time in US history, automated spending cuts occur if a deficit level is exceeded. They project that, by 1991, the United States will have returned to budget surplus. This is the penalty for agreement by moderates within Congress to the push by Senate Majority Leader Bob Dole to achieve a raising the current debt ceiling by $180 billion for coming year.
US Secretary of Defence Caspar Weinberger is interrogated by the House of Representatives Armed Services Committee. The inquiry has already spoken to two former Defence Secretaries and a former Chairman of the Joint Chiefs. Congressman Les Aspin (D-Wisconsin), Senator Barry Goldwater (R- Arizona) and Senator Sam Nunn (D-Georgia) all express criticisms of Pentagon performance.
Alden W Clausen announces his intention to step down as president of the World Bank. US President Ronald Reagan confirms the Chairman of the Federal Reserve, Paul Volcker, will take over the position in February, ending Wall Street speculation about Volcker’s future. With both US Secretary of State George Schultz and White House Chief of Staff Don Regan having been former Treasury Secretaries, they instantly become favoured as potential Fed chairmen. However, realistic speculation points to others, including John C. Whitehead, former chairman of Goldman Sachs and Deputy Secretary of State, and Walter Wriston, former Chairman of Citibank and current chairman of the US Council of Economic Advisers.
General John W. Vessey, the US Chairman of the Joint Chiefs, steps down. He is replaced by Admiral William Crowe. It will be during Crowe’s administration that the position of the CJC will be substantially modified through the work of Senator Barry Goldwater (R-Arizona), who is Chairman of the Senate Armed Services Committee.
Discussion in the US Congress on the Reagan tax plan, now into its fifth months, is postponed. New restraints on spending, passed by the Congress on 15 October, have made it impossible for a bipartisan bill to make it through in short order and Congressional leaders state that tax reform is off the agenda.
The Gramm-Rudman amendment, passed by the US Senate three weeks previously, is amended by the House of Representatives to exclude food stamps, Social Security and veterans pensions from any cuts to expenditure. However, the news is overshadowed by the need to rescue Farm Credit, the largest lender to American farmers, who have now joined the throng of weakened banking institutions.
Charles Schwab Corporation, one of the largest brokerage firms in the United States, announces a takeover bid for BankAmerica, in conjunction with a former holding company, First Interstate Bancorp, and a consortium of other investors. BankAmerica CEO Sam Armacost states that the bid is below market expectations and encourages stockholders to reject it. However, by mid-1986, as continued crises at BankAmerica depress the price of stock, the sale will be finalised. The banking arms will be merged to form Bank of America.
Oil company Texaco faces bankruptcy after losing its fight with Pennzoil for control of Getty Oil. In the largest civil verdict in US history, it is ordered to pay $10.53 billion, although its loss is even greater as once valuable assets are forced to be handed over. Over the next two years, it will stumble from crisis to crisis, attacked by the Saudi state oil company, Aramco, and American rival, Mobil, before finally collapsing entirely.
A respected US opinion poll releases a comprehensive report on the Cold War viewed from the US. It shows that 75% of the population is willing to trade away SDI for large reductions in Soviet weapons. 59% believe SDI will work, 54% believe it should be built and 53% think that it will make the country more secure. 83% think more summits are a good idea and 87% thought reduction in nuclear weapons across the globe was “very important”. At the same time, only 7% expressed confidence in future progress and twice as many thought no progress could be made at all. 60% believe that the Soviets cannot be trusted and 31% of Americans believe the same about their own government in relation to honouring any agreement. At the same time, 84% know little or nothing about the new leader. Interestingly, the majority (57%) who know something of the new Soviet leader express trust in him. 86% believe that Reagan should exercise control over military expansion and a small majority believe he is increasing the threat of war. Asked to talk on foreign policy, 71% supported a return to détente. On the domestic front, Reagan’s job performance rating is at 56% - down 11% since July - and the major concern is the swollen federal deficit and the weak economy.
The Gramm-Rudman stalemate is paralysing the US Congress, who has been forced to grant themselves a one-month extension of borrowing power to prevent a US default and to prevent the government shutting down. There are calls for deep cuts in US defence spending, which the Administration refuses to tolerate.
Citing it as the second step in his tax reform agenda achieved, US President Reagan announces that he has reached a deal with Congress and its Ways and Means Chairman, Dan Rostenkowski (IL-D). The fifteen different tax brackets will be reduced to just four, set at 15%, 25%, 35% and 38%. While it increases the lowest rate from 11% to 15%, it gives the average American a cut in their tax of nine percent. Mortgage interest will remain deductible for second homes, but Individual Retirement Accounts and depreciation deductions are severely restricted. It increases revenue by $138 billion over the next five years. The top corporate tax rate falls from 46% to 36%. It is said the growing influence of Treasury Secretary James Baker ensured the success of the deal. The Tax Reform Act of 1985 will pass within days.
Joseph P. Kennedy II announces that he will run for the seat once held by his uncle, Massachusetts’ Eighth Congressional District. (He will win the seat the following year.) It commences speculation on the chance of Senator Ted Kennedy, 53, entering the 1988 race for the Democratic Party nomination for President.
US Attorney General Edwin Meese suffers defeat in his battle with Labor Secretary William Brock over affirmative action measures, leaving Executive Order 11246 in place and continuing what is regarded by some as “reverse discrimination” and “racial quotas”.
US President Ronald Reagan signs the Gramm-Rudman Amendment, ending the Budget standoff between himself and Congress. Under the arrangement, the budget will need to be trimmed by $56 billion over the next year, of which half must come from military programs. Even this is a temporary measure, with defence no longer protected in the 1988 fiscal year.
US DEA chief, Jack Lawn, states that his new target will be “crack cocaine”, which has become an epidemic in usage since it first appeared on Los Angeles Streets in 1994. In just one year, cocaine-related emergencies have risen by twelve percent and medical staff are expecting it to book within the next year. US Democratic Senators John Kerry (MA), Tom Harkin (IO) and Christopher Dodd (CT) have established a subcommittee to investigate links between the US Administration and the drug trade.
The US Attorney General, Edwin Meese, caves into political pressure and orders an internal CIA inquiry into the activities in Honduras conducted by the Reagan White House. The CIA chief, William Casey and former US Ambassador to Honduras, John Negroponte, are both to be interrogated over the Battalion 316 reports. On the same day, groups providing support and sanctuary to Central American refugees protest in five states, claiming that they have been subject to systematic FBI harassment. There are increasing calls for Meese to resign.
Senator Edward Kennedy (D-MA) announces that he will not be seeking the White House in 1988, and admits that he is content with the possibility of never being President of the United States.
The US Treasury Secretary James Baker issues a statement on the economy. He predicts that the annualised rate of GDP growth in 1986 will rise back above three percent, but that unemployment will stay at or just under seven percent. He also points out that tax cuts will encourage corporate investment and consumer spending, but projects that inflation will remain flat due to a falling dollar (it has dropped 17.5% this year). Baker wishes to the dollar to drop by a further 10 to 15 percent in order to eliminate the annual trade deficit, which this year will reach $145 billion. Economist Alan Greenspan disagrees, stating that American companies have been engaging in a borrowing binge since tax cuts were confirmed, and debt will bring lead to gradual deterioration of the economy over the next year.
US President Ronald Reagan vetoes the Congressional decision to raise farm subsidies to $52 billion over the next three years. This is twice the figure projected by the Administration, and is in violation of the promise to reduce budgetary spending. To compensate, he agrees to allow legislation that rescues Farm Credit, a privately owned cooperative holding farm debt of $71 billion. The rescue is necessary to ensure the security of the bond market, which each year had bought debt from Farm Credit.
Tower Commission Report names Robert MacFarlane, plus CIA Director William Casey, Defence Secretary Caspar Weinberger and Assistant Secretary of State for Inter-American Affairs Elliott Abrams. It is revealed that the primary delivery has been anti-tank and anti-aircraft missiles, and that both the United States and Israel were shipping weapons to Iran.
US Assistant Secretary of State Elliott Abrams resigns in connection with the Tower Commission Report. As the first political victim of “Irangate”, there are recommendations for his indictment, which will be achieved later in the year. Abrams will eventually serve four months in prison before being freed under Presidential pardon.
Senator Garry Hart (D-CO) announces that he will not seek re-election for the Senate in 1986. With Senator Kennedy not planning to run for President, Hart has the largest profile of any potential Democratic challenger and a national organisation, and it appears only New York Governor Mario Cuomo can thwart his nomination. Many in the party feel that Hart would have been a better candidate than Walter Mondale in 1984.
Postmaster General Paul Carlin and Agriculture Secretary John Block both announce their resignations from the US Cabinet. They will be replaced by Albert Casey and Richard Lyng respectively. Lyng served in Reagan’s administration when the now-President was Governor of California.
Former US Transportation Secretary, Drew Lewis, calls for President Ronald Reagan to reduce national sulphur-dioxide emissions and points to the Soviet plan for flue gas desulfurisation. He is backed by William Davis, former Premier of Ontario, whose province has been particularly affected by acid rain. Reagan continues to insist that there is evidence for acid rain being a natural occurrence.
It appears as though polls are holding for US President Ronald Reagan, whose job approval has remained at 56% in all polls for the last two months. It also appears though as if Republican numbers have stabilised, perhaps due to the passage of tax cuts for most Americans.
US Commerce Secretary Malcolm Baldrige begins a campaign to reform anti-trust laws to make mergers less difficult and wins support from Senator Strom Thurmond (R-SC). However, even with the endorsement of US Attorney General Edwin Meese, it is expected to face strong opposition in Congress.
Senate Majority Leader Bob Dole (R-KS) states that settling the Budget deficit should be the national priority, claiming US President Ronald Reagan reneged on the farm bill, a deal to defer Social Security payments and a promise to consider new revenues measures. He advocates that nothing must be immune from cuts and pledges to cut $60 billion from spending this year. Dole is more acerbic than his predecessor, Howard Baker, in distancing himself from the White House.
Researchers in the United States refer to abuse of illegal drugs in the workplace now costing the US economy $60 billion in direct costs and $33 billion in lost productivity. DEA Director Jack Lawn states that the figures are based on 1983 outcomes, not 1985 outcomes, and points to how companies with drug screening have reduced their workplace accidents by 70% over the last two years. He also states that the street price of cocaine has risen by 25% in the past two years.
After giving a speech attacking Democratic New York Governor, Mario Cuomo, the US Vice President, George Bush, is drawn into a controversy over whether or not, if elected, he would continue the close relationship between the White House and Moral Majority leader, Jerry Falwell. Falwell continues to wear distrust over his endorsement of the South African regime last year, and Bush will decide to decline an invitation to be the keynote speaker at a Moral Majority meeting.
The New York Stock Exchanges loses nearly two months of gains, plunging back below 1500 in response to the threats of the Lima Group. Chase Manhattan Bank will lose ten percent of its value in one day. The Toronto Exchange also records its deepest slide in more than four years, losing 2 percent of its value. Commerce Secretary Malcolm Baldrige has a press conference that afternoon to announce that US GDP growth has fallen from 3.2% to 2.4%, but he states that falling oil prices will restrain price inflation and boost growth at the same time. He also states that the current price fall alone would wipe $9 billion off the US trade deficit.
BankAmerica announces the suspension of stock dividend payment after it is convicted of failing to report cash deposits and transfers over the past five years. Further investigation will reveal a write-off of $2.2 billion in bad loans and the devaluation of assets by $1.6 billion. This results in a three percent fall in the stock in one day.
A cluster of anti-Mafia cases, including the so-called Commission Case, begin today. Rudolph Giuliani, the US Attorney for Southern District, New York, will, as prosecutor, make himself a national household name.
A day of rotating ranks in the Reagan Administration, as Paul Volcker resigns as Chairman of the US Federal Reserve. He will go to work as Chairman of the World Bank. The new Fed chairman will be Walter Wriston, while Beryl Spinkel will assume Wriston’s duty as Chairman of Economic Advisers.
Former Vice Presidential candidate, Geraldine Ferraro, announces that she will run for the Senate, representing the state of New York, and running against Republican incumbent, Alfonse D’Amato.
US Speaker, Tip O’Neill, meets with President Ronald Reagan to discuss the budget for the 1987 fiscal year. With the Gramm-Rudman provisions demanding a cut of $76 billion over the next year, it appears as though there will be brutal cuts but neither the Democrats nor the Republicans are prepared at this stage to give ground on their favoured federal programs. 12 February
Three judges of the US Federal Court vote unanimously that the Gramm-Rudman Act is unconstitutional and refer the matter to the Supreme Court. The first round of cuts ($11.7 billion scheduled for 1 March) will nonetheless go ahead until the Court can decide to hear the issue.
Computer software manufacturer Microsoft makes its IPO, with shares trading between $16 and $19. Stating that Microsoft has the potential to become a “bellwether for promotion of technology”, the Soviet International Investment Bank takes a 2.2% stake in the company for $10.3 million.
US President Ronald Reagan warns Congress that he will not tolerate tax increases to balance the budget, nor will he delay progress on the next step of tax reform. “Any budget sent to me with a tax increase will be veto-on-arrival,” he states. Particularly feeling the pinch and the uncertainty are farmers, with Farm Credit sending out eighty thousand notices a month of intention to foreclose.
Walter Wriston, the new Chairman of the US Federal Reserve, states that projected growth has been understated, and the economy can be expected to grow by 3.1% over this year and unemployment is expected to fall to 6.7%. The benchmark prime rate is also under trending downward, after falling from 13% to 9.5% over the last eighteen months. With lower oil prices meaning downward pressure on inflation, rising costs of other imports prevent a consumption outbreak from the recent tax breaks. There is even talk of a further lowering of interest rates. The dollar is currently sitting at 163 yen and 2.11 deutschemarks. Wriston suggests that manufacturing will grow this year at higher than expected rates and that the trade deficit will also fall. The stock market welcomes the information, reaching a new high of 1631.16 on the Dow Jones Industrial Average. Wriston also warns that the budget deficit needs to be reigned in, putting more pressure on Congress who must soon start to negotiate the cuts if they want interest rate cuts.
One storm after another hits the northern Californian coast, with the forced evacuation of over fifty thousand people from their residences. An aberration in the Pacific jet stream has dumped excessive water and officials are concerned that, despite a long drought, the capacity of reservoirs will be tested. While damage is caused, no lives are lost and long-term, northern Californian water security is vastly improved.
Chairman of the US Federal Reserve, Walter Wriston, advises President Ronald Reagan that the continuing fall of the dollar (now 162 yen and 2.09 deutschemarks) is undermining confidence in the fundamental strength of the currency. However, Treasury Secretary James Baker is arguing that the currency should continue to fall to eradicate the trade deficit and to eradicate the chances of a protectionist Congress, plus it would eventually correct itself. He also argues that domestic oil is at its lowest price since 1979 around $15.50 a barrel and British North Sea oil down around $18.50 a barrel, the falling real price of total imports will continue to boost the economy without boosting inflation and American manufacturers remain happy. Reagan sides with Baker over Wriston.
CIA Director William Casey is questioned before the Senate Select Committee on Intelligence on innumerable issues. He has hedged and blocked the attempt to make him appear before the Senate since early January and had been given a reprieve by focus on the Challenger disaster. Senator Patrick Leahy (D-VT) claims that he gets more useful intelligence from his morning newspaper and, when the CIA Director suggests that the Committee is not sufficiently circumspect, even the Republican Chairman, Senator David Durenberger of Minnesota, is enraged. It seals his fate as one of the last directors of the Central Intelligence Agency, and ultimately, the fate of the Agency itself.
The US Senate ratifies the UN Convention against Genocide by 83 votes to 11, but the Administration has recently stated that previous Senate resolutions allow the USA to exempt itself from the jurisdiction of the International Court of Justice over cases involving compliance with treaties. Majority Leader Robert Dole denies that the two actions have nothing to do with each other.
Senator John Danforth (R-MO) is photographed by journalists shaking hands with a lobbyist on the steps of the Capitol. After allegations against Deaver and reporters questioning him of lobbyists, Senator Danforth states that the Washington lobby system has never had so many members and they were never so “brazen” as now.
The Washington Post begins a two-day coverage of the lobbyist system, publishing the details of all ex-Reagan officials now working for lobbyist firms in the city. It will follow up with details of the largest lobby groups and their connections. It suggests there are few boundaries between the Administration and the lobbyists.
As the US President Ronald Reagan begins to push this week for increased defence spending, polls showing a massive decline in support for the idea. Congress argues that the Pentagon needs reforming, not funding. The figure emerging from discussions between the two parties are that defence expenditure might be cut from $311.6 billion, the President’s preferred forward estimate, to as low as $228.4 billion. Senate Republican Charles Grassley of Iowa states that the public believes they are “more threatened by red ink than by reds”.
US Federal Reserve Chairman Walter Wriston admits that BankAmerica has sought liquidity support and that, though the stock price has fallen by a third today after their failure to open their doors, investors and account holders should not be concerned about the bank’s continued operation. Wriston states that BankAmerica is being charged a penalty rate for the emergency funding. The Dow Jones Industrial Average falls from 1698.77 to 1671.57 points, with heavy losses on banking stocks. The heaviest sales are for BankAmerica, which will end the day down ten percent.
After another ten percent fall in BankAmerica shares the previous day, the wider consumer base of BankAmerica stops believing the government’s assurances. They commence a run on the bank. It is estimated that, in the one day, $1 billion is withdrawn, approximately 7% of all holdings. There is grave concern that this will continue over the coming days.
Governor Mark White (D) of Texas attends the 150th anniversary celebrations of the Battle of the Alamo. Under heavy attack for his no-pass, no-play policy, he now also comes under attack for insensitivity to San Antonio’s Hispanic population for attending the ceremony. Unable to antagonise both African Americans and Hispanics, White has to commit to finding exclusions to his education stance and will eventually wind back the policy. The US Senate Budget Committee Chairman, Pete Domenici, votes down Reagan’s proposed budget for the 1987 fiscal year, with half of the Republicans on the committee voting with him.
BankAmerica shares are being sold in a panic, down 72% on last week’s close and being quickly purchased by competitors. It is estimated that BankAmerica is operating solely on a line of credit and may have expended its total holdings. Without the ability to call in its substantial loans, the Federal Reserve announces that it will guarantee all deposits and the stock bounces up 18% before the day’s close. BankAmerica begins running a TV campaign to advise its investors that their money is safe and by tomorrow, queues will begin to disappear.
US Federal Reserve Chairman Walter Wriston announces a drop of 50 basis points in the US discount rate, from 7.5% to 7.0%. Usually, a combination of tax cuts and rate cuts would stimulate inflation, but the low cost of fuel makes the risk of inflation minimal. He states that this is necessary given the recent rise of unemployment to 7.1%, with the biggest rises in Texas, California and Illinois. He states that this will also help creditors of American banks to renegotiate their loans.
The New England Journal of Medicine reports that war veterans are 86% more likely to commit suicide than a member of the general population and are 53% more likely to die in a motor vehicle accident.
After being caught swearing on a public microphone, US President Ronald Reagan wears a SOB – Save Our Budget sweatshirt, making most of the electorate grin and a minority fume.
The Dow Jones Industrial Average closes on a new all-time high of 1756.89, with confidence that growth will exceed three percent, low interest rates continuing to boost investment and falling inflation. The low dollar (down thirty percent in the last year) has made the US more competitive, and is also reducing the debt levels of developing countries. The New York Stock Exchange is trading an average 172 million shares per day, as various firms’ projects rise in after-tax profits of between 10% and 18%.
US President Ronald Reagan announces a $5 billion, five-year effort to eliminate acid rain, following a meeting with Canadian Prime Minister Brian Mulroney in which he, once again, complains to the US leader about the sulphur oxide created by the industrial and power heartland of the Ohio Valley. Over half of the money will go to re-equipping current plants, thirty percent will be directed in updating combustions system and the remainder will go to building pilot plants for “clean coal” technologies in Indiana, Maine, Maryland and Pennsylvania.
Goldman Sachs, one of the New York’s largest investment houses, states that exponential growth in consumer debt is not a problem for the US economy, as the net worth of households is also on the rise. They also point to the booming stock market, which last week hit a new record of 1768.55 points on the Dow Jones Industrial Average.
US Treasury Secretary James Baker welcomes the announcement that domestic inflation fell by 0.4% in February, citing a 6.4% fall in energy prices because of low oil prices and a 13.0% fall in the price of food because of overproduction by farmers. Agricultural experts predict ongoing trouble for the US agricultural sector as it struggles to meet its own debt obligations.
The Mayor of Los Angeles, Tom Bradley, begins a national debate on oil by attacking the US Administration and Californian governor, George Deukmejian, over a controversial plan to sell a new set of offshore drilling leases. He argues that “the country and the world are awash in oil” and that drilling would harm both the fishing and tourist industries. Interior Secretary Donald Hodel replies that the US needs to develop 32 billion barrels in oil reserves over the next ten years to ensure a stable domestic supply. Failure to do so, he states, will increase US reliance on imports from the current rate of 27% of consumption. Democrats in the House respond that, with a guaranteed price until 2000, such plans can be delayed for at least seven years and the oil leases may be able to fetch a higher price at a later date.
Fighting breaks out on the campus of the University of California, Berkeley, as demonstrators against apartheid face off against police with bottles, rocks and chunks of concrete. The students are protesting the university’s $2.4 billion investment in various US companies doing business in South Africa. Over 150 are arrested and thirty-three police and protestors end up in hospital.
US evangelist Jerry Falwell announces the cancellation of his inspirational telephone message service after homosexual activists coordinate to flood the lines. With nearly two hundred thousand “prank” calls, at a cost to Falwell of $1 per call, he admits he will be forced to cut back on evangelistic services.
Faced with growing demands for transparency, the White House announces the appointment of an independent prosecutor to investigate the illegal sale of weapons to Iran by the National Security Agency. Professor Wade H. McCree of the University of Michigan was Solicitor General in the Carter Administration and Special Master of the U.S. Supreme Court.
Chicago-based Arthur Andersen, the largest accounting firm in the United States, admits to a House of Representatives subcommittee, that most firms are paying at least $3 million per year in liability lawsuits and outstanding lawsuits represent ten billion dollars. They report that the accounting industry is facing a crisis, and that increasingly, accountants are the “only solvent party left standing to target when a company fails”.
Southern US states have banded together to establish “Mega Tuesday”, a regional primary for the 1988 election season. It has been suggested that the date will fall on 8 March of the year of the presidential election. It is expected that the major beneficiary on the Democrat side will be the Reverend Jesse Jackson. Other states begin to consider moving up their primaries, while some Congressional members suggest the power to establish primaries should be taken from the states.
The Federal Reserve Chairman, Walter Wriston, reports that the ongoing high rate of unemployment in America (currently 7.3%) is because companies cannot get the employees that they need due to “knowledge and mobility restraints”. He also warns that this will place upward pressure on inflation and he calls for the restoration of federal job-training funds to assist business in the transition. He also defies expectations by holding interest rates at 7%, warning that Japan’s recent decision to cut rates will boost the value of the dollar, increasing the price of exports and again putting pressure on inflation.
The first surrogate “test-tube baby” is born in Michigan, though the name of the child is suppressed. Since the discovery of the technique eight years ago, there have been nearly two thousand IVF children delivered through the world.
US House Speaker Tip O’Neil admits that Congress has failed to pass a budget resolution for the 1987 fiscal year by the deadline (15 April), but he calls upon President Ronald Reagan to compromise. Reagan states that the Congress now wishes to completely ignore the Gramm-Rudman Act and expresses hope “that missing deadlines, political squabbling and ignoring reform will be visited on the Congress when they face the people in November.”
After months of argument about immigration in neighbouring Arizona, the governor of the US state of New Mexico, Toney Anaya, proclaims his territory to be a sanctuary for any person fleeing persecution or armed conflict anywhere in the Americas, hurting the cases of the US Justice Department against those Roman Catholic groups assisting “illegal immigrants”.
Senator Strom Thurmond (R-SC) introduces legislation to the US Senate to bar key federal office holders from ever working as lobbyists or advisers on behalf of foreign governments or corporations. He is joined by Senator Majority Leader Robert Byrd, who instructs Attorney General Edwin Meese to open an investigation into lobbying, starting with former deputy White House Chief of Staff, Michael Deaver. This anti-corruption drive has the side benefit of making it almost impossible for importers to hire US lobbyists, marginally driving down the US trade deficit for the month and raising further hope among exporters. President Ronald Reagan calls the whole exercise “a ridiculous political witch hunt”.
US Independent Prosecutor Wade McCree states there can be no doubt about the Administration’s use of Israel as a smuggler of $2.5 billion worth of military equipment to Iran. “There is no doubt about these facts and charges will be laid, but we have a responsibility to the American people to investigate this matter fully,” he states. It is hinted that the first charges should be laid within the next eight weeks.
Friends surrounding Senator Paul Laxalt (R-NV) state that he is preparing to run against Vice President George Bush in the upcoming primary race. A Laxalt campaign would draw key Reagan supporters away from Bush, and would also weaken plans by Congressman Jack Kemp.
A US opinion poll finds that former Senator Gary Hart is the most popular potential Democratic contender, followed by New York Governor, Mario Cuomo. Third place falls to Lee Iacocca, former chairman of Chrysler, who has strong independent support.
US Vice President George Bush, New York Congressman Jack Kemp and television evangelist Pat Robertson all meet up campaigning in Michigan. The convoluted Michigan primary process requires candidates to register by 27 May. Both Bush and Kemp are hoping to make Michigan a test of strength; however, there is a wide expectation that Bush will easily win this primary as he had in 1980.
New Mexico Senator Pete Domenici, the third term Republican chairman of the Senate Budget Committee, finally stitches together a Senate resolution which passes overwhelmingly. It cuts the President’s planned spending by $21 billion, but increases taxes by $12 billion, while also cutting a further $12 billion in already established programs. This brings in the deficit at $162 billion (about 9% outside projected targets).
The US Senate Inquiry into the CIA reaches a conclusion that Ambassador John Negroponte had “played down human rights abuses” and “turned a blind eye” to the involvement of the Honduran military in the drug trade. Negroponte resigns as Assistant Secretary of State.
After some early and convincing bidding, the Democratic National Convention for 1988 is scheduled to take place in Atlanta. Competition for the conventions is now considerable, with an estimated $30 million surplus generated by such an event.
The US Federal Reserve notes an outrageous level of demand for housing, with sales of new homes up to the highest levels on record. The median price of existing homes has now risen to $80,000, with it being very expensive in the Northeast (over $100,000 for a house). Meanwhile, bargains are available to be had for a bargain in Houston, where homes are at their lowest prices in twenty years. Those refinancing are saving themselves over three percent in interest (up to $200 per month). The Reserve warns that the fall in the oil price has created a recession in Texas, creating expectations that interest rates are headed down even further. 21 May
British Prime Minister Margaret Thatcher and her Secretary of State for Northern Ireland arrive in the United States. She has been invited to speak to various Senators, and she stresses the need for approve a new extradition treaty between the United States and the United Kingdom, giving her access to IRA members hiding out in the USA. With opposition from both sides of the political divide, including Jesse Helms (R-NC), John Kerry (D-MA) and Christopher Dodd (D-CT), the “Iron Lady” stresses that Britain’s response to any attempt to water down the treaty will be seen as “the provision of sanctuary to the worst of murderous thugs” and would result in “a tremendous anger in Britain”.
US Attorney Rudy Giuliani lays charges of insider trading against Dennis Levine, the managing director of Drexel Burnham Lambert. It is the largest case ever prepared by the Securities & Exchange Commission, and shows that three investment houses, including Lehman Bros and Smith Barney, were involved in the corrupt practices.
Senator John Kerry (D-MA) announces that Nicaraguan businessman Adolfo Calero is prepared to testify to the Senate Foreign Relations Committee on involvement by the US government in the trade of “crack” cocaine. This produces a belated admission by the White House that the contras had been involved in the drug trade, but not at any time during the last eighteen months. This is disputed by journalist Robert Parry, who claims to have his own “Deep Throat” working within the CIA.
One of the frontrunners for the presidential nomination of the US Democratic Party, Governor Mario Cuomo of New York, states that he would regard the presidency as a burden. The press conference is to stage his re-election campaign for Governor. His approval rating in New York is over seventy percent and he has a campaign war chest of over $10 million. It is hoped that Cuomo could be the mediator required to bring together the Rainbow Coalition of Jesse Jackson, and the Democratic Leadership Council.
US President Ronald Reagan vetoes Congress’ decision to block the sale of arms to Saudi Arabia. It is unclear if the Congress has the numbers to override the presidential veto, but the matter is delayed while the Senate is in recess. There is quiet disappointment expressed in Riyadh by the government of King Fahd, with a suggestion that Saudi Arabia may turn to Europe for future support. A poll out today gives the Administration considerable political capital. Over the past month, support for the President has risen from 56% to peak at 74%; White House officials are elated at this new lease of life for Reagan’s second term when new economic data shows a 3.7% annualised rate of growth. The bad news is that it appears inflation may be raising its head again, thanks to the combined effects of a stabilising dollar, the new tax cuts, a massive interest rate cut, and the end of fuel discounts.
The investigation into former White House Deputy Chief of Staff Michael Deaver widens to draw into question actions by former National Security Advisor, Robert McFarlane, and Federal Communications Commission Chairman, Mark Fowler. Both men are named as persons of interest in the corruption allegations. Fowler will soon resign under pressure from the allegations, but will be fully exonerated.
The Dow Jones Industrial Average hits a new record of 1839.18 points after three months of positive forecasts from the Commerce Department and general investor feelings are that the market will hit the “magic” 2000 mark within the next year should the bull run hold. Despite new upward pressure on inflation, consumer prices have fallen by 4.1% over the past year and there is speculation that the US Reserve is planning another interest rate cut.
Under the unusual Rube Goldberg process which Michigan has adopted for its nomination process for the US presidency, it appears as though the Rev. Pat Robertson has emerged as the frontrunner in that state, with Vice President George Bush not far behind and Congressman Jack Kemp filling out third position. Pollsters note that Robertson cannot be a viable candidate, with his positives only just ahead of his negatives, and suggest that Robertson supporters will eventually switch to Kemp over Bush.
New statistics released today show that the US trade deficit has climbed to $148.5 billion and point to jobs lost as a result of trade. The Republicans and Democrats unite in the US House of Representatives to pass new protectionist measures by 295 votes to 115. The bill is unlikely to pass the Senate and would certainly be vetoed, but it outlines free trade as a major political issue in the upcoming Congressional elections.
New polls are released in the United States relating to potential Senate races in November. They show that the results will bode well for the Democratic Party, however, this is mainly a result of the large number of Republicans coming up for re-election (twenty-two versus only twelve Democrats).
After the US Supreme Court upholds Roe v Wade, the decision to legalise abortion, Republican Party presidential candidates incorporate abortion into their campaigns. Senate Majority Leader Robert Dole and Rev Pat Robertson argue that the ban on abortions must be re-instated; Congressman Jack Kemp states that abortions should be permitted where the life of the mother is at stake. Vice President George Bush refuses to enter the debate, but is previously on the record for stating that his opponents’ views are too narrow, and that they make no allowances for rape and incest. The National Right to Life Committee declares that its faith in Reagan/Bush may have been “the biggest mistake in the history of the pro-life movement”.
US Senator Joe Biden (D-DE) leaks a confidential memo by the American Bar Association, which states that President Ronald Reagan has been appointing judges based on ideology and stating that eleven of his twenty-eight nominees “barely qualify”. Among those to be rejected is US Attorney Jefferson Sessions, who in on the record as calling the civil rights movement “un-American” and who claims to have no problem with the radical racist group, the Ku Klux Klan.
The New England Journal of Medicine releases an analysis of household shooting deaths across the United States over a five year period. They find that only three percent were related to an external threat. Ten percent of deaths were the result of criminal action by the gun owner and most of the remainder were suicide. They suggest that self-defence might be a primary motive for gun ownership, but that guns in a home are a greater threat to the inhabitants than to any theoretical criminal.
US Vice President George Bush announces that he has negotiated an agreement between the Pentagon and the US Drug Enforcement Administration. Under the deal, DEA chief Jack Lawn will have access to military radar surveillance and communications hardware. In addition, the army will be put at DEA disposal for planning raids on traffickers and manufacturers outside the United States. It is suggested that the Administration may be planning a campaign against the de facto Panamanian leader, General Manuel Noriega.
Pornography publishers claim that US Attorney General Edwin Meese is engaging in “McCarthyism” after he issues a blacklist which has been traced back to the ultraconservative National Federation for Decency. Playboy states that, as a result of threatening letters for the NFD, over eight thousand outlets nationwide have withdrawn the magazine from circulation. However, Meese has greater concerns after the Independent Prosecutor, Wade McCree, accuses him of interfering in his investigation of Irangate.
US Attorney General Edwin Meese resigns, after the independent prosecutor, Wade McCree, announces his intention to charge him with an attempt to pervert the course of justice by interfering in the Irangate investigation. He will eventually receive a Presidential pardon in early 1987, before the matter can be brought to trial. He will be replaced by former head of the California District Attorney’s Association, D. Lowell Jensen.
US Chief Justice Warren Burger, 78, announces that he will step down in September to take over as the Chairman for the 1987 Constitution Bicentennial campaign. President Ronald Reagan announces that Justice William Rehnquist will assume the mantle of Chief Justice, and the vacancy will be filled by conservative DC Court of Appeals judge, Antonin Scalia. While it is clear that Scalia’s nomination will pass through the Senate, there is considerable concern about Rehnquist’s elevation and suggestions by liberal Democrats that he should be blocked.
US market analysts express concern over the use of computer programs which hit the market on the third Friday of the last month of every quarter, with up to forty million shares changing hands in the last minute of trade. During this erratic period, the Dow Jones Industrial Average falls to 1842.80, wiping out most of June’s gains.
US President Ronald Reagan leads Independence Day celebrations in New York, following a $70 million restoration of the Statue of Liberty, including replacement of her nose tip and some new hair curls. The torch is entirely replaced and finished in gold.
Leaks out of the US Commerce Department suggest that US net foreign debt has tipped $100 billion in 1985 and that the trade deficit has blown out to nearly $150 billion. Subsequent briefings by the White House suggest that this was the result of a steadily stronger dollar since 1981, but that the lower dollar and the lower price of oil will turn the figures around substantially in this calendar year. 6 July
The popularity of US President Ronald Reagan slips to 59%, the first time below sixty percent since the Gulf of Sidra incident. Despite the scandal engulfing many in his Administration, he has only lost one Cabinet officer to date, and there remains strong popular support for the President himself.
New York Senator Daniel Moynihan, Virginia Governor Charles Robb, Pennsylvania Congressman William Gray, former EEO Commissioner Eleanor Horton and a number of Harvard professors agree to join Mario Cuomo’s Democratic gabfest on new approaches to resolving the nation’s permanently destitute class in the ghettos of major cities. They argue that recent tax cuts allow for an increase in the minimum wage, call for the introduction of a Child Tax Credit, and suggest child care assistance for low income workers among other proposals. They also call for a complete overhaul, though not necessarily a funding increase, for the education system nationally.
BankAmerica’s board confirms that the company is up for sale in order to meet the loans which the Federal Reserve has given it. Nobody is interested in buying the company under such terms, though the Charles Schwab consortium is now the largest shareholder, holding about twelve percent of stock. Additionally, the banking system is increasing concerned regarding its exposure to Texan oil barons and expects second quarter profits will be tight as a result.
The Gramm-Rudman Act, designed to contain US budget spending, is declared unconstitutional due to violation of separation of powers by the US Supreme Court. Democrats and Republicans both pledge to work together to “fix the holes” in the Act and to restore fiscal discipline.
The US Supreme Court, in two affirmative action cases, rejects the Administration’s rationale for changes to previous policy, deciding that hiring goals and timetables are not a form of reverse discrimination. Attorney General D Lowell Jensen uses the opportunity to consolidate his control of the Justice Department and asks for the resignation of Assistant Attorney General William Reynolds, the ideologue behind the Meese policy. It begins a series of decisions released throughout the week by the Court.
The US Supreme Court declares a Georgian law which criminalised sodomy between consenting adults to be a violation of the constitution, holding that a right to privacy is implicit in the Fourteenth Amendment. Justice Lewis Powell is alleged to have changed his vote after learning of an attempted blackmail of one of his clerks.
An experimental US navy airship, costing $31 million, loses power and crashes at the US Naval Air Centre in New Jersey. The vehicle, originally designed to airlift lumber from remote forests, had been upgraded by the military but experiences structural failure.
Governor Richard Lamm of Colorado and Governor Bob Graham of Florida tell a conference of US governors that the nation can no longer afford the explosion of rates in liability insurance and obtain an agreement from sixteen other states to place limits on the damages which can be awarded by the courts.
The Dow Jones Industrial Average closes the day at a new record, 1862.85 points. The DJIA is now up over three hundred points in the last seven months, and with projected further declines in interest rates, this is tipped to continue to rise. Despite continued revelations of insider trading and three arrests by the SEC this week alone, there is confidence that the bull run will continue.
The US Air Force reveals that an investigation into the failure of the Titan rocket in April has concluded the accident was caused by mechanical failure, rather than a design flaw. Secretary of Defence Caspar Weinberger states that the Titan will be ready for renewed operations by January, 1987.
The US Supreme Court rules that even truthful advertisements for lawful goods and services may be restricted by the states if an average person would accept that it was protecting the “health, safety and welfare” of its citizens by doing so. Congressman Mike Synar (D-OK) immediately introduces a legislation to prohibit tobacco, liquor and prostitution advertising.
As the stock market opens for the week in New York, the Dow Jones Industrial Average falls to 1832.22, a 30 point fall in one day. Concern about the banking system continues, with BankAmerica likely to make an announcement in the coming weeks about second quarter earnings. Also, tycoon James D. Ling will report on LTV Steel, which has been under serious competition from foreign importers.
The Dow Jones Industrial Average falls further, to 1808.25 and remains stagnant above the 1800 mark for the week after the US Federal Reserve Chairman Walter Wriston announces another interest rate cut, this time by 25 basis points on the discount rate to banks. Corporate interest rates will fall from 8.5% to 8.25%, while housing rates fall lower still. Treasury Secretary James Baker indicates that the dive was due to computer trading on the futures market. “It takes more than a couple of bad days to end this run,” he projects and says the developing hedge market is the driving force. House Budget Committee chairman, Pete Domenici, states that the economy needs to deal with debt, or last year’s tax cuts will sink the economy.
The US Farm Credit System confirms that it is facing a meltdown, with $12.2 billion in defaulting loans and an expected loss this year of $2.8 billion. The American farming community have been caught between layoffs, growing crop surpluses and the ever-present interest rates. US Agriculture Secretary Richard Lyng states that it is “nothing to sing about” and calls for Congress to underwrite its credit.
LTV Corporation, America’s second largest steelmaker, files for protection under Chapter 11 of the Bankruptcy Code. Chairman Richard Hay admits that the company has stopped generating income. In terms of revenue, it is the largest US company ever to declare bankruptcy. The company’s oil drilling and pumping arms has incurred large losses.
US Energy Secretary John Herrington warns that the USA is falling behind in nuclear power, after German and Soviet moves. He calls for the Administration to fund the creation of new commercial reactors, arguing that, “while the oil crisis has receded, it is likely to become a problem again if the Soviets interfere further in the region”. He also states that, while coal remains plentiful, its consequences of acid rain and air pollution limit its use. General Electric and Rockwell International express interest in government assistance. As Democrats call for controls to Republican expenditure, the majority in the US Cabinet begin to favour a large defence cut in order to boost the expenditure of all departments. US President Reagan, however, continues to support and publicly defend the policies of Defence Secretary Caspar Weinberger.
Former US Attorney General Edwin Meese is ordered to appear before a grand jury to determine whether or not he has a case to answer, after recommendations by the Independent Prosecutor, Wade McCree, that he be charged for attempting to pervert the course of justice.
The US Supreme Court rules that the National Security Council documents relating to the Irangate issue can be viewed by the Independent Prosecutor, stating that doing so does not violate national security. They reveal the divisions within the White House on the Irangate issue and show a clear memo to the President on Irangate, but no evidence that it was read by the President.
BankAmerica admits to the second-largest bank failure in US history, after a second quarter loss of $652 million, taking the combined deficit to $933 million over the past five quarters. Questions are raised about the ability of the bank to survive. On the same day, Oklahoma’s First National Bank collapses with debts exceeding $1.6 billion.
Despite pressure from the White House, the US Senate fails to approve the new US-UK Supplementary Extradition Treaty. While it is a device for gaining access to IRA supporters in the United States, the failure of British Prime Minister Margaret Thatcher to vocally support the strike on Libya and willingness to stay her hand on Libya has determined it would not be ratified.
Conservative candidate for a federal judgeship on the US Seventh Circuit Court of Appeals, Daniel Manion, is rejected by the Senate in a close vote. He is linked to the ultraconservative John Birch Society and has received a very weak response in request for support from the American Bar Association. It is seen as a defeat for the President and for the new Attorney General D. Lowell Jensen.
Arizona Governor Bruce Babbitt visits Iowa as a potential candidate for the Democratic Party for President. As Cuomo has still not declared his hand, it makes the Spanish-speaking pragmatic Governor only the second to firmly indicate that he is running for the White House.
The US President Ronald Reagan expresses concern over General David Padilla of Bolivia for his declining of the US Air Force to establish a base of operations just outside Santa Cruz, Bolivia. The base was intended to serve as the centre for attacking cocaine processing, despite not being in the affected area. Senator John Kerry’s inquiry into White House involvement in the drug trade is due to report in September. House Speaker Tip O’Neill calls on the Congress to divert funds from direct military programs to intercept programs, addict treatment and public education. John Cardinal O’Connor of New York backs the Democrat’s program.
Senator Richard Luger (R-IN), the independent-minded chairman of the US Senate Foreign Relations Committee, recommends a range of restrictive sanctions on South Africa. The national airline will be prohibited from flying into the United States, all savings transferred to the United States over the past eighteen months will be frozen, and no further visas to the United States will be offered. Senator Joseph Biden (D-DE), one of the strongest advocates for sanctions, states that it appears a “reasonable proposal” and “anything Lugar has to say on South Africa is something worth listening to.”
US National Security Council Chairman, Admiral John Poindexter offers his resignation to President Ronald Reagan after less than a year in office. His position has become untenable after Lockheed Corporation admit that nearly fifteen hundred classified documents (only one Top Secret) have disappeared from its files. It appears as though a worker had taken the documents home to impress his girlfriend, only to have his home burglarised that evening. Poindexter is replaced by Lieutenant General Colin Powell, who will retain his army commission during his tenure.
The US Equal Employment Opportunity Commission resumes the use of goals and timetables to remedy discrimination in US employment practices. EEOC Chairman, Clarence Thomas, refuses to comment on whether or not he endorses the action, brought about the recent US Supreme Court decision.
US President Ronald Reagan calls for the repeal of the 22nd Amendment to the Constitution, stating that it reduces Presidential effectiveness and is essentially undemocratic. He denies the motion relates to himself, stating that he will step down, irregardless of any reform, in January 1989.
BankAmerica declares bankruptcy. Those assets that remain valuable are sold to the Charles Schwab consortium. First Interstate is merged with the BankAmerica assets to become the Interstate Bank of America. However, the company will become known in the general community by its acronym, and it will in common conversation become “the IBA”.
As the result of a Greenpeace-led court case, the US Government is obliged to pay $35 million to the American Tuna boat Association to cover costs resulting from the Marine Mammal Protection Act 1984. The industry will slump in September as refitting is required on many ships to reduce dolphin deaths.
It is revealed by the Treasury Department that this year’s budget deficit will tip $230 billion in the coming year. On the same day, Citicorp advises that its second quarter losses were close to $700 million. US Secretary of Agriculture Richard Lyng predicts that the drought in the Southeast has killed a great portion of the region’s summer crops and put up the price of broiler chickens.
US Federal Reserve Chairman Walter Wriston warns that “difficult and dangerous” circumstances are upsetting the US economy. Despite an increase in the budget deficit and the trade deficit projecting to break the 1985 record, the widely expected turnaround in exports “has not arrived”. The economy expanded only by 0.2% in the June quarter, but jobless remained steady at 7.1% of the population. The dollar is currently sitting at ¥150.1 and is back on a downward trend.
US President Ronald Reagan announces the resignation of CIA Director William Casey, who has been investigated by two inquiries. Attorney General D. Lowell Jensen is to charge him with attempts to pervert the course of justice, a case that Casey will never answer. It has been discovered that the former CIA Director has brain cancer. He is replaced with the Director of the Federal Bureau of Investigation (FBI) William H. Webster after it becomes clear that the Congress will not allow the President to promote his favourite, the Deputy Director of the CIA Robert M. Gates. Taking over the FBI will be William Sessions.
US Vice President George Bush is forced to defend whether or not his Episcopalian beliefs are sincere, with journalists demanding to know if he is “born again”. He states that such a phrase means many different things to many different people, but that he “accepts Jesus Christ as Saviour”. It appears as though the Vice President is attempting to win over the right-wing of the Republican Party, who are appearing more likely to vote for Pat Robertson.
Claiming to have been left out of last year’s tax reforms, or left paying greater taxes, US business lobbyists argue for a twelve percent cut in company tax. Congressional leaders fear that further stimulus, particularly in the agricultural sector, will encourage investment in unprofitable ventures, and knock back the business demands.
Oklahoma postal worker, Patrick Henry Sherrill, is found dead in his home. While he has been killed by gunfire, it is unclear if it is murder or self-inflicted. The coroner will eventually make an open finding.
The US Independent Counsel, Wade H. McCree, widens his commission to investigate whether former Deputy White House Chief of Staff was guilty of perjury before a congressional subcommittee. It is also confirmed that the Director of the Office of Management and Budget, James Miller III, is under investigation by McCree’s office.
Senator David Boren (D-OK) leads a prestigious group, including Senator John Danforth (R-MO), Senator Barry Goldwater (R-AZ) and Senator John Kerry (D-MA), in passing legislation to tightly control political donations. However, there is little expectation that such legislation will pass the House before the upcoming Congressional election. It makes party funding a key issue over the next few months and results in the passage of the bill in 1987. 24 August
US House Speaker Tip O’Neill states that the House will kill any further Senate attempts to repackage foreign aid to Central America, demanding that the Administration instead focus on ending the uncertainty over Latin American capital markets. Senator Tom Harkin (D-IO) states that the Nicaraguan government is “bringing itself down by its inability to put food on the shelves” and their betrayal of their proclaimed values.
The Rev Jesse Jackson, one of the leading Democratic candidates for the 1988 Presidential election, states to a reporter his belief that US President Ronald Reagan should be impeached by the Senate. It creates a few days of headlines and creates a deeper division between Jackson’s Rainbow Coalition and the Democratic Party.
Secret meetings between a number of US Cabinet members become public. Secretary of State George Schultz has been chairing the group, joined by Treasury Secretary James Baker, Commerce Secretary Malcolm Baldrige and Labor Secretary William Brock. They state support for an immediate freeze on all defence spending and a review of the continual service of Defense Secretary Caspar Weinberger.
A Democratic National Committee advisory group warns that the United States is splitting into two countries: the Atlantic and the Pacific Coasts are growing at over 3.6% per annum, while the other 32 states manage an anaemic 1.4% only. It projects a continued growth in high technology and service industries into the future, but warns that agriculture and industry will remain depressed. It blames these two sectors for the burgeoning trade deficit. It also states that inflation has now virtually disappeared from the US economy, with prices actually falling overall this calendar year so far. Party chairman Tony Coelho suggests that there is a “popular revolt brewing” in the heartland of the United States against the Republican Party.
Travellers between Houston and Galveston complain about new police technology, a combination of camera, radar and computer unit that captures pictures of speeding drivers and fines them. The new speed camera will be subject to numerous legal and political controversies well into the future.
Long Beach Arena, Los Angeles turns into the site of a brutal demonstration of power by African American and Hispanic gangs during a concert for popular rap artists, Run DMC. Eighty-four people are taken to hospital, including two with severe stab wounds.
The US Federal Reserve cuts prime business rates to 8.25% and discount rates to 6.25%, with Walter Wriston stating that too dramatic a cut could once again feed inflation but that a 25 basis point cut will ensure that the recent sluggishness in the economy will be overcome. He stated that June figures show that the economy shrunk by 0.5% over the second quarter of the year, but he points out that interest rates have fallen half a percent since then, and growth for September quarter appears to be at 1.0%, or 4.0% annually. He categorically rules out recession, but refuses to rule out another cut in October.
The Washington Post speculates that, after a year of scandals and investigations, Cabinet members, including Vice President George Bush, are sinking into factionalism, with an editorial stating the Administration is a “slow-motion train wreck”. It also refers to a growing number of Democrats in the House, who seem to favour the idea of impeachment. Fortunately, for the Administration, the newspaper suggests these “radicals” are limited to less than one hundred.
The final delivery of US wheat to the Soviet Union is proclaimed a resounding success by Agriculture Secretary Richard Lyng. He states that it allows the Government to pay greater attention to the emerging financial crisis in the Southeast, which has been driven by the worst drought in the region’s history. He is pushing in Cabinet for a restructure package to allow those facing bankruptcy to adjust, now that capital is being pushed back into farms on the Great Plains.
The Dow Jones Industrial Average peaks at 1881.32 points, its highest point to date.
The Dow Jones Industrial Average experiences its largest fall in one day of trading, plunging 84.88 points to 1747.23 points. Trading volume is also the highest on record. Corresponding tremors spread out to Tokyo, London and other capital markets around the world.
The US Commission for Human Rights finds that Hispanic citizens are suffering from greater disadvantage than African American citizens. While African Americans are earning lower average wages, they are also having smaller families than previously. This means that they have more income per capita than Hispanic Americans.
US Senator John Kerry reports on the links between the US Administration and the drug trade in Central America. It exposes involvement by the National Security Agency and the CIA to pay drug traffickers.
The Dow Jones takes another fall, and volumes set a new record. The DJIA falls to 1723.55 points, as investors try to put the sale-off in perspective, pointing out that the market is still above where it started the year. Some claim concern over US debt levels and there is uncertainty about inflation as well. Leaks from the Department of Commerce confuse traders, as do new computer trading programs which accelerated the sell-off. White House press spokesman, Larry Speakes, states that the fundamentals of the US economy remain strong.
Senate Budget Chairman, Pete Domenici (R-NM), denies a plan to raise $38 billion in new taxes and to cut spending by $76 billion, nearly half of that from the defence budget. He states that a report leaked from his office, which threatened cuts to farmer subsidies and the end of “Star Wars”, was a “theoretical exercise only”.
A series of Senate polls show that Senator Don Nickles of Oklahoma and Senator James Abdnor of South Dakota both face a threat to their position. While Abdnor was already struggling, the possible loss of Nickles indicates that there may be a swing underway to displace the class of 1980. Senator Mack Mattingly of Georgia and Senator Russell Long of Louisiana are also shown to be on unsteady electoral ground. Some are suggesting that there will be a landslide toward the Democrats, though all but the most diehard dispute there is any possibility of the so-called “supermajority” of sixty senators. Nonetheless, only one Republican candidate is seemingly safe for election and enjoying strong financial support – Congressman John McCain of New Mexico, who will succeed to Barry Goldwater’s seat in November.
As debate continues on the endorsement of William Rehnquist as Chief Justice, it is revealed that he was caught speeding in an unregistered vehicle, with an out-of-date license. An aide of Senator Joe Biden (D-DE) leaks to media that, despite circling by his boss and Senator Ted Kennedy, they only have thirty-four votes against Rehnquist’s nomination at this stage.
US polls show that, if the Congressional election had been held today, the Democrats would have achieved a full 7% more of intending voters than the Republicans (37% to 30%). The undecided voters, however, represent more than 29% of the electorate. Republicans state that their party will keep the country strong, deal with inflation and keep the Soviets in control. Democrats state that their party is better in dealing with the interests of the people, ensuring rights, creating jobs and building the middle class.
Governor Bruce Babbitt of Arizona condemns attempts by multimillionaire developer Bill Schulz to re-open the Democratic nomination process. Babbitt states that the Democratic Party base must remain united behind candidate Carolyn Warner if the party is to retain the Governorship in November.
Walter Wriston, US Federal Reserve Chairman, states that Wall Street volatility does not indicate an economic downturn, arguing that the market would need to fall to below 1500 before that concern would be realised. He projects that the economy will continue to grow at 3% next year and that unemployment will remain at 6.7%, but that he refuses to comment on speculation that interest rates will continue to fall.
The US Senate grudgingly approves William Rehnquist as the 16th Chief Justice of the United States, with 61 voting in favour, 37 voting against and two abstaining. This is the most negative votes ever recorded by a successful court appointee. Republican Charles Mathias of Maryland is the most vocal objector, pointing to a 1972 case in which the new Chief Justice failed to excuse himself from a case on which he had worked as an Assistant Attorney General.
Reverend Pat Robertson of Virginia gives a Christian Broadcasting Network telecast from Constitution Hall in Washington D.C., stating that it is “God’s will” and that he has received divine guidance on behalf of the evangelical community.
Members of the G-7 note a 2.4% increase in the value of the dollar over the past week, indicating that the Plaza Accord may have collapsed. Critics of the US Administration state that the accord was meant to give the United States room to reduce its trade deficit, but instead the deficit has climbed by over $25 billion.
Special Assistant to the President Eliot Abrams pleads guilty of lying to federal investigators. He also directs the attention of the investigators away from the NSC and across to the office of the White House Counsel.
Increased volatility marks the US market, with the Dow Jones plunging 35 points before recovering to end seven points up. The Securities Exchange Commission is asked to investigate the phenomenon to determine how much has been caused by program trading.
David Johnson, executive director of the US Democratic Party’s Senatorial campaign committee, states that the Reagan “coattails” have been shortened, but are still sufficiently extensive to draw into questions polls which indicate that the Democrats are on their way to a landslide. He also states, however, that the contributions to the Democrats over the past year have demonstrated a strong ground-roots support.
The US Treasury states that progress is being made in cutting the US trade deficit, now down $2.8 billion in the last three months and continuing to show downward trends. However, the labour market is shrinking, with companies eliminating forty thousand jobs in September.
US Senate Appropriations Committee Chairman Mark Hatfield admits that the Congress has been unable to pass the hurriedly-drafted anti-drug bill, after no cuts could be found to pay for it and nobody wants to raise taxes this close to a Congressional election.
Under mounting pressure from ongoing investigations and isolation within the Cabinet, US Secretary of Defense Caspar Weinberger advises President Ronald Reagan of his intention to resign. He is bitter that it appears he will bear a large share of responsibility for Irangate, despite the fact that he opposed the decision, and he is also concerned over the health of his wife.
Former Vice President Geraldine Ferraro’s husband, John Zaccaro, is indicted for bribery. The former Vice Presidential candidate and current Senatorial candidate states that she continues to believe in her husband’s innocence but it puts an end to any hope of defeating first-termer Alfonse D’Amato.
US Assistant Secretary of State for Public Affairs Bernard Kalb publicly criticises the Libyan misinformation campaign after White House Chief of Staff Donald Regan and Lt General Colin Powell both pledge that a thorough review of the “thinking behind the decision”. Secretary of State George Schultz pressures for Kalb to be given a permanent desk in the White House communications office, particularly watching Patrick Buchanan.
Massachusetts police receive an anonymous tip-off that leads to the recapture of convicted murdered William Horton. Governor Michael Dukakis (D) claims it serves as a warning to those who “think they can escape the arm of the law”.
A new poll considers upcoming gubernatorial elections in the United States, to be run concurrently with the House and Senate elections in November. It predicts Republicans will hold California and Rhode Island, as well as claiming Alabama, while the Democrats will hold Arkansas, Colorado, Connecticut, Georgia, Hawaii, Idaho, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New York, Ohio, Oregon, Pennsylvania and Wyoming, while picking up Tennessee. States too close to call at this stage are: Alaska (D), Arizona (D), Florida (D), Illinois (R), Iowa (R), Kansas (D), Maine (D), Nebraska (D), New Hampshire (R), New Mexico (D), Oklahoma (D), South Carolina (D), South Dakota (R), Texas (D), Vermont (D) and Wisconsin (D).
US President Ronald Reagan announces the appointment of a new Secretary of Defense. Congressman Dick Cheney (R-WY), the ranking minority member of the inquiry into Irangate, will be promoted to the office. He will still contest his electoral district and will remain in Congress until the Senate has confirmed his new position. Reagan also states that a compromise with the Soviets on weapons is not impossible, but “discussions are ongoing”.
The US Congress attempts to pass new immigration legislation to deal with the hiring of illegal workers but moderate Congressional members are unhappy about plans to grant amnesty under the plan to illegal immigrants. They warn that the costs of the “meaningless” legislation, social benefits to the illegal immigrants, will be in excess of $8 billion, threatening to hurt the budget bottom line by paying out money to “people who have broken the law”.
New York Governor Mario Cuomo and Delaware Senator Joseph Biden emerge as frontrunners for the Democratic nomination for President after it is claimed that other candidates, former Senator Gary Hart of Colorado, Governor Bruce Babbitt of Arizona and Congressman Richard Gephardt of Missouri are each failing to gain any popularity among key fundraisers meeting in Iowa this week.
Rev Pat Robertson launches libel suits against two members of Congress, one Republican and one Democrat, for alleging that he used the connections of his father, a US Senator, to avoid combat duty in the Korean War. They respond that his official biography claims he was involved in combat, when there is considerable evidence that he spent a lot of time in Japan.
US Treasury Secretary James Baker reports that the US economy has ticked back to an annual growth rate of 2.4% for the three months ending in September. “There is no recession coming down the line,” he states confidently. He does, however, admit that the federal budget deficit for the year ending 30 September is a record $214.7 billion. Baker states that this is only $2 billion above last year’s level and indicates that the growth of the deficit has slowed significantly and that, given a short time span, the figures will finally begin to turn around.
The White House Counsel, Fred Fielding, resigns over accusations of a role by in his office in abetting the Justice Department’s frustration of Wade Hampton McCree, the independent investigator. He and his office will eventually be cleared of any wrongdoing.
In a Tennessee courtroom, a Federal judge rules that a local school district cannot force children to read textbooks which offend their parent’s religious beliefs. However, he suggests that a separate reading class would not shelter the children from all the things that their parents find objectionable in the public school curriculum and suggest to the parents that they are better to seek alternate schools than to drag the state into court.
With the election underway, authorities in the Justice Department confirm that former Defense Secretary Caspar Weinberger has been indicted by a grand jury over his role in Irangate. With many voters going to the polls with this in mind, it is uncertain as to how much effect it will have on the election.
After a long delay by the United Nations in approving recognition of the arrangement, the Northern Marianas are proclaimed as a commonwealth in association with the United States of America. President Ronald Reagan quickly issues recognition of the 17,000 residents as citizens.
US Congressional elections produce a landslide toward the Democrats, while gubernatorial elections favour the Republican Party. The new House of Representatives is: 271 Democrats; 164 Republicans. The new Senate is 58 Democrats, 42 Republicans. In the state houses, the Republicans pick up Alabama, Florida, Maine, New Mexico, Texas and Wisconsin. The Democrats take Iowa, South Dakota and Tennessee. The Reagan landslide of 1980 has been comprehensively reversed, indicating that his personal popularity has not been sufficient to prevent his most resounding political defeat since 1976.
Robert Reich, lecturer at Harvard’s John F. Kennedy School of Government, warns that industry is becoming a tool of financial manipulation and that reckless speculation and profiteering by “fast-buck artists”. He states that productive, long-term investment has ceased to be the role of stock trading.
National Security Advisor Lt General Colin Powell announces the resignation of Lieutenant Colonel Oliver North, deputy director of political-military affairs at the NSC. The two have been said to have had a number of clashes since Powell’s elevation in August. While McFarlane had been a personal friend and Poindexter a close associate, Powell has no such connection to North and finds his “cowboy tactics”, as he describes them off the record, offensive.
White House Press Secretary, Larry Speakes, denies that US President Ronald Reagan is avoiding facing the truth about recent Congressional elections, but questions whether the President will need to appear before televised conferences in future. He suggests that this mode of communication has “perhaps outlived its usefulness”. Others suggest that the President is increasingly alone and a “lame duck” within his own residence.
US Federal Reserve Chairman Walter Wriston announces an across-the-board decrease in interest rates, with the discount rate falling to six percent (6%). Wriston states that the money expansion rate is within the Fed’s target range for the year, and that, while stimulatory in policy, it is unlikely to cause another outbreak of virulent inflation. Others accuse Wriston of “missing the boat” in keeping interest rates at their current level.
The outgoing Congress recently unanimously passed a Clean Water Act, committing $18 billion over eight years to remove all solid and inorganic matter from US sewage. Republican Senator Robert Stafford of Vermont, the sponsor of the bill, warns President Reagan not to reject it, stating “if the President is dissatisfied with the cost, then maybe he should just wait and see what the Democrats come up with next year”. He is responding to suggestions that the President has not yet approved the bill because he plans to veto it. It shall be approved the following day.
At the Waldorf-Astoria Hotel in New York, Sugar Ray Leonard and Marvelous Marvin Hagler announce that they will fight each other in Las Vegas in April next year, taking in return the largest guaranteed purse in boxing history. It is reputed to be $23 million in value.
US Attorney General D. Lowell Jensen confirms that an investigation is underway into former White House staffer, Lyn Nofziger, for violating conflict of interest laws in helping a defence contractor land a $31 million contract with the US Army. It is also claimed that Nofziger got share options in the company prior to the awarding of the contract, making up to $107 million in the deal.
Wall Street investment bank Drexel Burnham Lambert projects $13 billion in revenues and $6 billion in profits for the year, placing notice to Merrill Lynch and Morgan Stanley on a new competitor in the bond market. There is, however, some suggestion that DBL may be involved in insider information.
A debate over sex education breaks out in the United States after a poll over AIDS shows that nearly 70% of parents admit they feel uncomfortable talking about sex with their children, and nearly 40% not having spoken to their teenage child on the subject. 86% support compulsory sex education and majorities over 70% favour teaching about AIDS and other STD’s, exactly how they are transmitted, birth control, premarital sex, intercourse, homosexuality and abortion, which also teaching that having sex at too early an age is harmful and urging students to practice birth control when having casual sex. There is debate over whether or not to include an urging to not have sexual intercourse until adulthood, and whether homosexuality should be actively discouraged. It leads to comprehensive sex education in US schools.
It is confirmed that West Virginian Senator Robert Byrd will be the new US Senate Majority Leader after all other potential candidates indicate they are withdrawing from the race. Byrd states a key issue for him will be the provision of new housing, expressing the belief that the Administration’s figures on homelessness are “fallacious” and blames the shortfall on an 80% fall in government spending on housing since 1980.
Northrop Industries admits that it is closing down the F-20 project, with costs of $1.2 billion being absorbed by the company. US Defense Secretary Dick Cheney states that a new order is to be placed with Northrop for an advanced jet fighter, as yet to be designed, giving the company nearly $700 million for it. Northrop will never produce the fighter jet, but will instead proceed with a stealth multi-role heavy bomber.
There is increasing speculation in Washington D.C. that White House Chief of Staff Don Regan, 67, has left the President Ronald Reagan “out of the loop” and anger that he is closing the door to all other sources of information and intensely criticising other sources of information. Leaks from unhappy Cabinet members and officials suggest that Regan bears responsibility for the Administration’s failures in communication and the sense of isolationism surrounding the Oval Office at this time. Over the next few months, his position will become increasingly untenable.
New polls show that 61% of the population believes that US President Ronald Reagan has deliberately misled the country over Irangate and Nicaragua and that his popularity has fallen to 55%, its lowest level since early 1985. New York Senator Daniel Moynihan (D) demands a full briefing for Congress, where even Republican members are becoming increasingly sceptical about the adventurism of US foreign policy.
The US Mafia is decapitated with the sentences handed down to Anthony Salerno, Anthony Corallo and Carmine Persico, the leaders of the Genovese, Lucchese and Colombo crime families respectively. The last surviving godfather, John Gotti of the Gambino family, is on trial in New York, as are a number of lieutenants from the various families. Combined with Italy’s endeavours, it is putting enormous pressure on the Mafia’s international operations.
It is confirmed that one of the leading men of US cinema, Cary Grant, has passed away at the age of eighty-two.
Senator Al Gore of Tennessee (D) calls for the declaration of the Arctic National Wildlife Refuge as a National Monument after the US Interior Secretary, Don Hodel, refuses to rule out granting leases to oil companies. The Southern centrist, who is speculated to be making a run for the White House, is part of the Atari Democrat group and is believed to be the only southerner running for the Democratic nomination. Gore also criticises the Administration, stating that its foreign policy is a shambles and is straining relations within the Western alliance.
Lt Col Oliver North is questioned by Independent Counsel, Wade H. McCree as to whether he had crossed into “reckless and illegal behaviour” during his time at the National Security Council. The press are interpreting the White House silence as North being “placed out to dry” and “taking the fall” for the Administration. Newspaper cartoons the following day have President Ronald Reagan in the water surrounded by sharks.
Garry Trudeau, author of Doonesbury, begins a speaking tour of the United States. He blames the national ills on US President Ronald Reagan, stated that he had turned the country “from its ambition of being good to the emptiness of feeling good” and that “we need to dispel the illusion that Reagan doesn’t mean the meanness of his policies”. He calls the President “ingratiating and manipulative”, but “only between the hours of 9am and 12pm Monday through Friday – that’s when he’s awake enough to work.”
In his anti-corruption drive, Manhattan US Attorney Rudolph Giuliani secures the conviction of Bronx president of the Democratic Party, Stanley Friedman, on charges of bribery and racketeering. It is clear that Giuliani has popularity with the community and has developed political ambitions.
US White House Chief of Staff Don Regan admits that the Administration is in the middle of a “hurricane”. He comes under criticism in the press today for having failed to defend the President effectively, with commentators stating that Reagan, instead of being visionary, is now seen as being “intellectually passive, oblivious to troubling details, rigid and maybe even detached from reality”.
The Dow Jones Industrial Average breaks a new high as investors turn again to blue chips, pushing the indicator to 1875.98, the second highest close in history and having recovered completely from the jitters of early October.
US National Security director, Lt General Colin Powell, admits that, in the past, his agency has engaged in “playing outside its territory” and states that the matter has been resolved in internally, with the State Department, the CIA and the National Security Council setting up an intra-agency agreement on intelligence cooperation. He admits that this has severely restricted his own role, stating he may only now give advice, and may no longer conduct operations or enact any policy decision.
US President Ronald Reagan is criticised, after it emerges he recently spoke to his former Attorney General Edwin Meese, despite Meese having been indicted and due to go to trial in January. Senator Sam Nunn of Georgia (D) states that the President has shown a lack of judgment.
US Vice President George Bush speaks to the public for the first time since the crisis began to envelop the Administration nine weeks ago. He admits that he attended meetings at which illegal contacts to renew the conflict in Nicaragua were discussed, but states he could not provide a full story and would be pleased for the President to continue to have his deepest trust. He talks about the need for the Administration to reach out to the new Supreme Leader, Grand Ayatollah Imam Hossain Ali Montazeri and find grounds for peace between the two countries. He admits that he had met the CIA agents involved in Nicaragua, but had believed them to be working in El Salvador on another mission. When journalists draw comparisons between the Reagan and Nixon Administration, the Vice President laughs. He suggests that he and the US people have “the same hopes” for the President.
President Ronald Reagan gives an interview from his Santa Barbara ranch, stating that he feels “bitter”. He claims that “I was not fully informed” by his own staff of all the details. He criticises today’s decision by the US House of Representatives to demand the President recall them for a sitting, stating that it “is a frenzy”, that it will not paralyse the government, that he has the support of “four in five American voters” and that it is nothing more than “Beltway bloodletting at its worst”. Asked whether he might resign, Reagan says that he still has a lot to do and that he “won’t back off”. He also warns that time is running out for the Soviet Union to pressure Nicaragua into handing back CIA officials.
Senator John Kerry (D-MA), a member of the Senate Foreign Relations Committee and head of the investigation into the National Security Council, states that the Congress members should not allow “instant hysteria” to take over. He warns that, whatever the outcome, it is better that it be handled by new Democrat-controlled Congress. Nonetheless, it is believed certain that impeachment proceedings will begin the minute the 100th Congress convenes in January.
French President Laurent Fabius questions the basic stability of the US Presidency, while French Prime Minister Simone Veil claims to have nothing to say. While the West German government will not comment either, one of their Cabinet members is cited as saying that he is amazed at the “increasing sloppiness of the Administration” and that it will be a long time before anything the US does in the name of drugs and terrorism is credible. Georgi Arbatov, head of the Soviet Institute of US & Canadian Studies, tells Pravda that the scandal is a “second-rate Hollywood feature starring a second-rate Hollywood actor”. Other European governments are complaining about a lack of consultation and anti-Arab bias. Central American government comments are that they are tired of the lack of continuity in US policy.
General Motors pays $700 million to buy out its largest shareholders and multi-billionaire, H. Ross Perot, giving him double his initial investment to end his criticism and carping against the GM culture and board. The operating loss for General Motors this quarter is $345 million and its sales are down 10% over the year. The chairman projects that a further five thousand workers will be laid off in the coming months.
New polling from the New York Times shows that approval for the US President has fallen from 55% to 44% in just one fortnight, and, if the downward trend continues, the White House is faced with its most difficult year ahead since 1974.
Independent Prosecutor Wade H. McCree meets with US President Ronald Reagan in a tense discussion in the Oval Office. Reagan then consults with Attorney General D. Lowell Jensen regarding possibly scuttling the investigation into his Administration by dismissing McCree. Jensen states that he will resign, rather than back down to the pressure of the President and the White House Chief of Staff, Don Regan. Many of the US Administration officials are seeking at least partial immunity for being part of criminal cases against their seniors. Senator David Durenberger states that, “with so many taking the Fifth, you really must doubt the President’s credibility on this one”. Senator Sam Nunn (D) of Georgia, the new chairman of the Senate Armed Services Committee, states that “we all have a stake in the credibility of the Presidency and I trust that it shall be restored as quickly as possible.” 16 December
Outgoing Senator Gary Hart confirms the worst kept secret in politics, launching an exploratory committee for a 1988 Presidential bid. He expresses fear that US President Ronald Reagan has become so isolated “that he might easily be manipulated”. He refuses to comment on who might be manipulating the President.
White House Communications Director Patrick Buchanan criticises Republicans voters for having “abandoned” the party in November, “at a time when we could have prevented this political war”. He compares criminal acts within the NSC to the protection of runaway slaves during the Civil War and the 1776 Revolutionaries. Visiting Miami, he tells Cuban Americans that “God will bless” Lt Col Oliver North for attempting to interfere in Nicaraguan affairs.
Late in the day, White House Chief of Staff Don Regan announces his resignation, advising that the President has appointed his Assistant for Legislative Affairs, Kenneth Duberstein, as the new Chief of Staff. He refuses to discuss rumours that Senator Howard Baker of Tennessee had been offered the job.
US Chairman of the Federal Reserve Walter Wriston wraps up the year with a positive review. He states that this year’s growth will end up being 2.3%, and the economy will grow by 2.7% next year. He states, “I see no real break in the stride of expansionist monetary policy”. Former chief economic advisor to President Ford, Alan Greenspan, states that the trade deficit is also showing a turnaround. After an estimated $156 billion this year, next year’s deficit is projected to be $133 billion.
Sitting before the US Senate Foreign Relations Committee, Lt Colonel Oliver North appears in full Marines dress uniform and takes the Fifth Amendment. As he leaves Congress, movie agents claim they would be willing to pay $5 million for the exclusive rights to his story.
The Washington Post expresses concern at the ongoing credibility of US President Ronald Reagan, stating that he keeps talking about wanting to know the facts, but appears as “puzzled” as everyone else. It has now emerged that the National Security Council was channelling funds through numbered accounts in Switzerland on behalf of a company incorporated in Panama, which had officially disappeared in October. General Richard Secord (rtd) of the US Air Force is named as a person of interest. US Secretary of State George Schultz, speaking via satellite from Europe, tells the Senate inquiry that he has dismissed Ambassador John Negroponte from the Administration, and that he was not informed of many decisions within the Oval Office, especially if he disagreed with the initial suggestion. This is later confirmed by former NSC Director McFarlane and former Attorney General Edwin Meese, who state that the policy was set by the President, but that the details of the “Nicaraguan plan” were known only to Oliver North.
New polls out in the New York Times today ask popular feeling about US President Ronald Reagan. 49% of the electorate are prepared to agree to the statement, “The President is lying”. 35% are prepared to say, “The President is telling the truth.” The remainder refuse to absolutely commit to either statement.
After some controversy within the Democratic Party caucus, Congressman Tom Foley (D) of Washington is named as the new Speaker of the US House of Representatives. It appears that there have been questions drawn over the Wright Amendment, with calls being made to Democratic district offices and Republican pundits suggesting that Jim Wright of Texas is a symbol of what is wrong with Washington.
Impeached US President Richard Nixon criticises those “sniping at the President”, stating that “his critics should get off his back” and that those doing so are weakening the prospects of peace. He states that President Ronald Reagan has assured him that he had no knowledge of illegal actions. “He told me so, and I believe him.”
Potential Democratic candidate for US President, Reverend Jesse Jackson, meets with Japanese Prime Minister Yasuhiro Nakasone. During the meeting, he suggests that the United States should boycott Japanese goods whose companies fail to ensure they have equal opportunity employment practices. He names Toyota for allowing inequality within its workplace.
CIA Director William H. Webster announces that he will open his files to investigation by a select committee of Congressional leaders to ensure that they are fully informed of everything the CIA has on operations in Nicaragua. He states that the agents recently returned from Nicaragua were not there on behalf of the Agency and were not commissioned or paid by the Agency. He states that he has confidence that National Security Advisor, Lt. General Colin Powell, will continue to cooperate in “cleaning up the NSC”. He suggests that the National Security Council may have been involved in illegal activities dating back to 1984.
US Senator Joseph Biden (D-DE) announces that he is making a bid for the Presidency, seeking the Democratic Party nomination for the 1988 presidential elections. He becomes the second Democrat to enter the race for the White House.
The seven-month investigation of the business affairs of former Deputy White House Chief of Staff, Michael Deaver, ends with charges that he lied to a House subcommittee earlier in the year. The investigation into Lyn Nofziger remains ongoing.
US President Ronald Reagan is confirmed to be undergoing surgery earlier in the New Year. He will be in hospital from 4-8 January, where he will undergo surgery for an enlarged prostate and to further test his colon following his 1985 operation. Doctors state that there is a very high expectations that any malignancies found will be slow-growing and not a significant future health factor for the 75 year old.
Vice President George Bush, Senator Bob Dole in New Hampshire. Howard Baker puts in an appearance. Polls in Iowa are showing that Dole is ahead of Bush. In a hypothetical election against Gary Hart, Bush loses 65% to 31%. The candidates at year’s end are: Republican – Bush, Dole, Robertson, Baker; Democrats – Hart. Others named as potentials for the Democrats are Virginia Governor Charles Robb and Senator Sam Nunn of Georgia.
Police in Puerto Rico report the arrest of three hotel workers and two others over involvement in a plot to commit arson against the Dupont Plaza Hotel. FBI officers on the scene state that this could easily have become a mass grave for over one hundred party-goers.
The US Congressional Joint Economic Committee reports to the White House that it has ignored trends in employment and wages, resulting in a rise of Americans living below the poverty line to nearly 34 million people, or 14.3% of the US population. It recommends that the minimum hourly wage should be raised from $3.35 to $3.65. Companies suggest that this will speed up the restructuring of American industry to allow them to release minimum wage employees.
US Secretary of Health and Human Services, Dr Otis Bowen, recommends reforms to Medicare to allow for the financing of long-term care of chronic conditions. Rather than meeting all bills for the first sixty days then a gradual reduction of government support over six months, he suggests that, under Part A of Medicare, the government should only cover 80% of hospital costs but should cover them indefinitely. The remaining 20% of any bill would need to be covered from private spending or insurance. An inflation-protected cap of $2000 maximum personal costs will be imposed. Federal Insurance contributions would rise to 3.5% of taxable income, an increase of 0.6%. Dr Bowen suggests that it may also reduce “unnecessary servicing” in the health industry, make Medicare “more responsible for its own funding” and ending crippling medical bills for about eight hundred thousand Americans. The plan is embraced by Congress and the Administration, with opponents stating that it does not go far enough.
US National Security Advisor, Lt General Colin Powell, confirms that he has sacked over one-sixth of his staff since taking office just four months ago. He states that the National Security Council is “eliminating unnecessary operational capacity and reorganising the command chain in order to enhance changes in functionality”. He also confirms the appointment of Lt General William Odom as his deputy.
It leaks that the US Republican Party’s preferred location for the 1988 convention is New Orleans; while there are thorough denials from the party executive, it will eventually emerge that the rumour mill is right. Analysts suggest that both parties, in choosing Atlanta and New Orleans, are attempting to reconnect with the South and that this will favour any Southern candidate.
The US states of Nebraska, North Dakota and Rhode Island admit that, after one year under new federal tax regulations, they are faced with double-digit falls in their revenue. New York Governor Mario Cuomo and his counterpart in Ohio, Governor Dick Celeste, both agree that the federal government should assist states with revenue shortfalls.
The Brooking Institute reports that, without a tax increase, there is no way that the deficit can be slashed to $108 billion target agreed on under Gramm-Rudman, down from $154 billion in the last year. The White House states it is possible through the sale of long-term public assets, such as the Amtrak network.
A meltdown is narrowly averted at a nuclear power plant in the US state of Washington. It fits with recent international warnings by Soviet scientists that the use of graphite to control the nuclear explosion is unstable and that protective domes are necessary to prevent the accidental release of radiation.
The families of the victims of the space shuttle Challenger are offered one million dollars each in compensation for the deaths. Five of them agree to settle, while two will press on with cases against NASA and contractor Morton Thiokol.
US President Ronald Reagan undergoes a colonoscopy and prostate surgery. Senator Robert Byrd, the new Majority Leader, states that, while he wishes the President a speedy recovery, but states that the Administration is “terminal”. The US Senate is gravely concerned about the drift in the Administration towards stagnation and that the trade deficit has gone up again, against predictions.
In California Federal S. & L. Assn. v. Guerra, the US Supreme Court rules that a state may require companies to provide higher levels of pregnancy benefits than the minimal required by federal law and that doing so does not discriminate against men. Justice Thurgood Marshall states that the protections assist men and women equally. Congresswoman Pat Schroeder (D-CO) points out that the United States is the only major industrialised nation with no national policy to provide maternity leave and states she will introduce a bill to create 18 weeks unpaid leave with job security for both mothers and fathers. Governor Thomas Kean of New Jersey (R) criticises Schroeder as being “excessive” and suggests that six weeks of paid pregnancy leave would be preferable for business and for families experiencing the costs associated with childbirth.
A person connected to the Senate Intelligence Committee leaks an incomplete report on the scandal enveloping the Administration. It concludes that the President “did not comprehend fully what his staff were doing”, and “had not read or understood key elements of his intelligence finding”. It draws further question over a President who remains in hospital after his second major surgery in as many years, as does a poll which shows that the President’s popularity has fallen below fifty percent.
US Secretary of Labor William Brock announces the State Worker Adjustment Assistance Scheme. The Administration will triple the amount of money available for worker training programs to $1.032 billion, so that states suffering revenue or employment shortfalls will be able to tap into federal revenue. The WAA Scheme is praised by Pat Choate, Chair of the Congressional Economic Leadership Institute, and is expected to create nine hundred thousand new jobs.
Following a recent Amtrak accident on the Washington-Boston service, Massachusetts Governor Michael Dukakis (D) states that the rail network should not be sold off, but should be completely reconstructed. “The Japanese and the Europeans are on to the future of transport. Even the Soviets have worked it out, but this Administration has done nothing except run (the network) down and now try to spruik it off,” he states. “The Greeks have a word for this – hubris.”
Discovering the pleasures of holidaying in Iowa in January is the new for US presidential contenders and five arrive today to conduct campaigning: Delaware Senator Joseph Biden, Arizona Governor Bruce Babbitt, New York Congressman Jack Kemp, former Delaware Governor Pete du Pont and former Colorado Senator Gary Hart.
Japanese traders begin a run on the US dollar, instead buying in yen and deutschemark. The move is picked up in Frankfurt, despite strong efforts by the local central bank to halt the slide. Foreign currency exchange pauses in Manhattan as no buyer can be found for the US dollar and it falls 3.5% over the next week. The dollar is now trading at 147.9 yen and 1.79 marks. Despite these negative signs for the currency, the market hopes it will lower the trade deficit. Traders say that the United States needs to deeply cut spending,
Senator John Kerry (D-MA) points out that the White House is planning to cut nearly a quarter of the drugs budget, after spending much of the last two years talking about the drug war.
The Dow Jones Industrial Average continues its upward climb, reaching 1942.2 points at closing today and tomorrow will rally a further three points. Speculation begins on when the index will break through the psychological barrier of 2000 for the first time in its history. Liberal economist John Kenneth Galbraith opposes the popular view, suggesting that the rapid rise in stock prices since 1982 is a bubble and that price-to-return ratio has fallen substantially. Traders point out that this is a global trend, with the Nikkei and FT-500 showing rises of 43% and 21% respectively during 1986.
US Chairman of the Federal Reserve, Walter Wriston, provides an economic update, stating that growth for 1987 is projected to be 2.2% and unemployment will remain at about 7%. He also suggests that the Administration may need to prepare itself for the possibility of a fall in corporate earnings in the first quarter. However, he states that he remains unconvinced that releasing further money into the economy will do anything to boost productive spending without wages reform.
Senator Jesse Helms (R) of North Carolina, commenting on cuts to the drugs budget, states that it is time for the Administration to turn its attention on dealing with the drug cartels, in particular “disposing of the head of the biggest drug trafficking ring in the Western Hemisphere”, the President of Panama, General Manuel Noriega. Senator Helms states that he is sceptical that the White House has the capacity to deal with the matter.
The New York Times reports on a poll of 14,000 people. It shows that 44% of Americans believe it would be “better for the country” if the President resigned, with only 28% stating it would be better if the President stood firm against the Congress. On the question of impeachment, 67% expressed the view that impeachment would be bad for the country. 60% agree with the statement that they want a “change in direction” by the Administration. 51% (and one third of Republicans) believe that Vice President George Bush was “more involved” than he claimed in the Nicaraguan and Iranian scandals; nonetheless, 60% of respondents have a favourable opinion of the Vice President. On key identification words for Republican candidates: “leadership” Dole 82%; Kemp 73%; Bush 47%; “integrity” Kemp 60%, Dole 58%, Bush 48%; “experience” Bush 74%, Dole 67%, Kemp 47%. The poll also shows that Rev Pat Robertson has lost ground – favourable rating has fallen from 45% to 24%. On the Democrat side, undeclared candidate New York Governor Mario Cuomo had greater name recognition than either of the declared candidates, former Colorado Senator Gary Hart and Delaware Senator Joseph Biden. All three have high favourable ratings on Democrats and independents: Cuomo 63%, Hart 59%, Biden 57%.
The US House Judiciary Committee opens impeachment hearings into President Ronald Reagan, despite the fact that polls show only a third of the populace believe that the President should be impeached. Peter Rodino Jr (D-NJ), who conducted the initial inquiry into President Richard Nixon, is responsible for this investigation also. The Senate Judiciary Chairman is presidential candidate Joseph Biden, who is immediately called on the potential conflict of interest between his two roles. He agrees to suspend his campaign for the duration of the uncertainty.
Former US House Speaker Tip O’Neill signs a series of deals to give six speeches a year and provide an autobiography for Random House, raising his income from around $100,000 per annum to over $400,000 per annum. He also agrees to do a series of celebrity appearances at golf events with former President Gerald Ford.
After US President Ronald Reagan smiles and waves to the press corps, but refuses to engage, CBS morning anchor Jane Pauley wonders whether the President is “too out of touch and has lost his ability to govern”. It follows an article in the New Republic, which calls the President “brain dead” and after Senator William Cohen (R-ME) states “We’ve slipped through the rabbit hole into fantasy land. The President is asking the Congress to describe to him a plan devised, formulated and executed inside the Oval Office.” House Republican Leader Robert Michel is reported to have had a meeting with the President in December during which the President had wandered off into an anecdote from a speech he had recently memorised and there are rumours that Education Secretary William Bennett may be about to resign.
Budd Dwyer, Treasurer of Pennsylvania, commits suicide during a live press conference after being found guilty of multiple charges relating to the bidding process for government contractors. Due to school being cancelled due to poor weather, many children are home and being raised by the television when Dwyer pulls the trigger.
Senate Chairman of the Labor and Human Resources Committee, Edward Kennedy of Massachusetts, states that there will be increases in minimum wage during this Congress. He refuses to be drawn on the purported $3.65 per hour, but suggests that raising consumer income will raise higher levels of consumer revenue in the longer term. He also calls the current $3.35 “offensive”. Two days later, the Congress votes a raise of 15.6% for themselves. They will use the traditional justification of the “best and brightest” getting compensation for their “public service and personal sacrifice”.
Investigations into the recent Amtrak crash show that the Amtrak train was travelling at 20 km/hr above the limit. They also show the Conrail freight train which hit it was travelling at 32 km/hr above the speed limit and that both the engineer and brakeman were “under the influence” at the time. The National Transportation Safety Board argues that greater automation is needed in the rail network.
The White House issues a series of new details for the President during his “convalescence”. State functions have been delayed and the President is working three hours a day, while the Vice President, George Bush, will assume most of the President’s regular duties. The President will be kept constantly advised of all activities, say his staff.
The Dow Jones Industrial Average records its largest one-day gain in history, rising just over fifty points. The index now stands at 2032.15 points, having broken through the psychological double millennium mark. The following day, the market will break another record, trading nearly 293 million shares in the one day. The exchange will close the week at 2059.49 points.
Senator Arlen Specter (R-PA) calls for direct US intervention against Iran after two Lebanese men are arrested while in West German customs carrying bomb-making equipment. He states that they are directly connected with Iran and that the United States should take more steps to protect itself from terrorist attack.
The US National Academy of Sciences condemns the Pentagon for the classification of dual use technology, arguing that it is losing the nation billions of dollars in exports each year. It states that, despite restrictions, most of the technology ended up in Soviet hands anyway. It estimates that lifting the bans could create two hundred thousand new jobs and $9 billion in revenue. Commerce Secretary Malcolm Baldrige endorses the report, arguing it shows that cuts need to be made to the military budget.
Mark Hofmann, an antiquities dealer who defrauded the Church of Jesus Christ of Latter Day Saints (the Mormons) by creating forgeries, is sent to prison for setting pipe bombs to murder people who have been able to debunk his forgeries. The Church does not recover quickly from this painful and discomforting exercise.
US civil rights advocate, Reverend Jesse Jackson, states that Congress should pass legislation to prosecute landlords who refuse to rent to black families, and setting goals for hiring of a minimum percentage of minority employees. Most Americans agree on the former, but the latter is disregarded as likely to lock minorities into basic wage jobs.
US Secretary of State George Schultz admits in closed testimony to the House Foreign Affairs Committee that talks with the Iranians have been ongoing, despite claims by the White House. He also states that White House aides have continually refused him access to the President, demanding to know the intended content of his discussions before he is permitted into the Oval Office.
US House Speaker Tom Foley holds a special conference on trade, and suggests that he will have a trade bill to present to the House of Representatives before May. He suggest a retraining package for employees, research and development tax breaks and a loosening of anti-trust laws to allow American companies to band together against foreign competition.
Senator Richard Lugar (R-IN) remains the ranking Republican of the powerful Senate Foreign Relations Committee, essentially rejecting the sacrosanct seniority system. He knocks out Senator Jesse Helms of North Carolina, who was attempting to move from the Agriculture Committee leadership.
US Treasury Secretary James Baker declares his anger at banks refusing to pass on interest rate cuts to their credit card facilities. He warns that, unless rates are lowered from their current “loan-shark” level of 19.8% to a more respectable 13%, the government may need to begin to withdraw billions of dollars of federal funds depositing in the banking system.
US President Ronald Reagan gives his 1987 State of the Union address. The press attack the President for failing to address the sense of crisis enveloping his Administration and recycling parts of previous speeches. The Democrats in the chamber respond with partisan jeering. The speech is generally interpreted as having failed to provide the rescue the US government needs.
The US Senate finishes its report on Watergate. It states that, given contradictory statements, either former Chief of Staff Don Regan or former National Security Advisor John Poindexter has committed perjury. It also states that 1) the CIA has been operating covert activities without White House approval since 1981; 2) that former Attorney General Edwin Meese had not participated in collusion, but had tried to cover it up and 3) that the NSA had deliberately conspired to keep the State Department out of the loop. The details are absorbed by the House Judiciary Committee in its ongoing impeachment investigation.
US House Speaker Tom Foley criticises President Ronald Reagan for threatening to veto the Water Quality Act in his first public speech in his new capacity. He states that “the gap between rhetoric and reality” is his major concern, and that Reagan’s “greatest accomplishments” were “expanding our deficit, contracting our job base and making Wall Street’s sometimes-worthless paper our primary export.”
Governor Michael Dukakis of Massachusetts stresses his heritage and environmental credentials by publicising his decision to declare Walden Pond, the 400-acre state park, as a sanctuary with only guided tours. The former home of Henry David Thoreau will be restored to its pristine condition so that it can continue to provide what he described as “liquid joy and happiness”.
White House Press Secretary Larry Speakes announces that he is resigning from public office at the end of April, the longest-serving Presidential spokesperson since the 1950’s. He admits he has decided to take employment with Merrill Lynch. He states that it is probable that the Vice President’s Press Secretary, Marlin Fitzwater, will act until the White House confirms a new press chief.
The monthly deficit for December pushes the final US trade balance for 1986 to $173.2 billion deficit. However, the monthly deficit has fallen to $10.9 billion and Secretary of the Treasury James Baker states that the size of the trade deficit may halve over the next two years.
A Rand Corporation report indicates that, despite homelessness rates in the United States, rental units in the cities are plentiful. It suggests that, outside New York and Houston, the problem is the failure of the wage market to provide sufficient income to cover the costs of running and maintaining a rental property. Senator Robert Byrd calls an increase in the amount available through housing vouchers, arguing that “no low-income family should have to pay more than $45 a week” to “ensure a roof over the heads of all our citizens”.
US Democratic Senator Daniel Moynihan of New York proposes a merger of ideas from both Republican and Democratic sources to solve the lack of popular support for the Aid for Families with Dependent Children program. It establishes that people will lose access to benefits per child, which have allegedly encouraged “educational and cultural devolution”. Instead, parents will receive a fixed payment based on an income test until the youngest child begins primary school, as well as federal payments to cover immunisations for babies. It also outlines new tax deductions for children for middle class Americans and educational allowances available to those who will receive the parent payment. Parents who cease to be eligible for the payment but remain unemployed will be forced to spend two days a month in a welfare-to-work program and will need to demonstrate five employer contacts a week in job-seeking activity. Activists, particularly in the African American community, state the new program is onerous and will prove “debilitating” to single parents.
Protests rock the Nevada test site for American nuclear weapons after the US tests its 25th nuke since the Soviet moratorium was introduced two years ago. Astronomer Carl Sagan and actor Martin Sheen are among those arrested, while the House of Representatives immediately opens debate on cutting off funds for nuclear testing as long as the Soviets adhere to their own ban.
White House communications director Patrick Buchanan announces he is stepping down from the position to return to his career as a political pundit, attacking “liberal elites”. The investigation into Lyn Nofziger has recently spread to include Angela Buchanan (Patrick’s sister). Buchanan states that he will remain dedicated to his sister’s defence but denies his departure is to allow him to prepare for a run for the presidency.
US Democratic presidential nominee, Gary Hart of Colorado, calls for the introduction of a $5 per barrel fee on imported oil during an interview on Good Morning America. He states that it will allow him to restructure Third World debt problems and overhaul the education system nationally. On foreign policy, he states that he would welcome a nuclear test ban, a moratorium on the development of new missiles and a 50% reduction in the arsenals of both superpowers. 17 February
Following rumours that he is about to resign, CIA Director William Webster denies the allegations. He states that he will remain in the office until after the next presidential inauguration in January, 1989, when he will hand over to the nominee of the next US President. There are suspicions that the story was planted by those loyal to his deputy, Robert Gates, who was denied the opportunity for advancement by uncertainty as to his involvement in the Iran and Nicaraguan scandals. (Gates will later be one of those cleared by the Special Prosecutor.)
While on a visit to Houston, US Vice President George Bush pledges to give “greater focus to the war on drugs”, should he be elected President next year. He pledges a series of new Customs Service surveillance and communications centres will be constructed across the southern borders, including one in Houston itself. He later repeats the promise in San Diego, when overseeing the delivery of two new radar planes.
Former US National Security Advisor, Robert McFarlane, attempts to commit suicide by overdose after he is committed to stand trial.
In a court settlement in Mobile relating to a 1981 murder, the United Klans of America are ordered to pay $7.2 million in damages and compensation to the victim’s mother. The settlement will bankrupt America’s largest Ku Klux Klan organisation and its members, who are forced to hand over all their assets, including the national headquarters in Tuscaloosa.
New York Governor Mario Cuomo and former California Governor Pat Brown hold a sell-out Democratic Party dinner, at which party insiders suggest that Cuomo will announce his run for the Presidency in 1988. He fails to make any indication but political strategists state that his upcoming visits to Texas, Louisiana and Florida have nothing to do with his current role.
US Democratic Party Chairman Paul Kirk is forced to make a public apology after being heard to comment disparagingly on a potential appearance by former President Jimmy Carter at next year’s convention. Unfortunately, in the process of apologising, he disparages President Ronald Reagan and is forced to apologise for a second time.
US President Ronald Reagan is said to be “sombre” regarding the future of his Administration and has allegedly sounded former members of staff and close friends about the possibility of an early retirement, especially given his perceived inability to recover from ongoing health and political problems.
A number of US Democratic congressmen, backed by Governor Charles Robb of Virginia, begin to speculate on the possibility of a restoration of national service for one year between ages 18 and 25. Like the Soviet program, it will not require military service, but will retain military service as an option. Presidential front-runner Gary Hart states that “it is appropriate for young Americans to return some of the investments and advantages they have received.” Of primary concern to supporters is the “baby bust” as the number of new adults has fallen from 4 million per annum in 1980 to 3.4 million today, and is projected to fall further to 3.2 million by 1990. However, the Pentagon strongly opposes the idea.
US Senator Chris Dodd (D-CT) denies allegations by Capitol Hill staff that he has discussed with fellow senators the prospect of denying funding to all White House initiatives until the House of Representatives has finished its impeachment investigation. He states that “such ideas would be pointless” given the power of the President to veto legislation to that effect.
The American Enterprise Institute issues documentation relating to a substantial fall in the US birth rate. It states that those born between 1965 and 1980 are part of a generation with the lowest birth rate in US history and that school populations have fallen by 13% in the last ten years. It notes that college student numbers have also fallen by 9%. It states that the “baby bust” will force a number of social changes, ranging from social security shortfalls, increased employment for minorities and women, lower crime rates, less traditional families and increased demand for migration.
Cigarette smokers in the bureaucratic service of the United States are advised that their agency heads will be required to allocate new areas for them to engage in their addiction. They will no longer be permitted to smoke at their desks, but should move into restrooms or corridors. Both the State Department and the IRS are resistant to the change.
American Motors Corporation, makers of the Jeep Cherokee, admits that they can no longer continue operations, with accumulated debts of $790 million. Their European owner, Renault, has already begun to make moves towards purchasing Nissan and sells the debt-free structural and creative assets of AMC to Chrysler for an undisclosed sum, believed to be about $400 million.
Political extremist Lyndon LaRouche denies that he authorised five Southern support groups to sell unregistered loan securities on his behalf after sixteen members of his party are arrested. LaRouche attempts to claim that the charges are a political “dirty trick”.
After nearly a week of intense speculation, the Governor of New York, Mario Cuomo, announces that “I will not add my name” to the list of those contesting the Democratic Party candidacy. His indication leaves former Senator Gary Hart as the sole frontrunner and increases the chance that Massachusetts Governor Michael Dukakis might enter the race as the north-eastern candidate. The person most likely to benefit is Senator Joseph Biden of Delaware, regarded as the candidate most likely to stir the party’s emotions compared to Hart’s cerebral approach.
The Dow Jones Industrial Average closes the day at a new record, reaching 2168.18 points, despite new scandals relating to insider trading, securities fraud and other criminal activities. Morgan Stanley, a major investment bank, states that confidence in the underlying strength of the market remains strong.
New York Congressman Jack Kemp calls for the resignation of US Secretary of State George Schultz, arguing that “the Shultz doctrine has replaced the Reagan doctrine” and that Schultz bears responsibility for the Administration’s failures in Afghanistan, Nicaragua and support for SDI. Recent polls suggest that Kemp is ahead of Senator Robert Dole, but running behind Vice President George Bush, as the potential Republican candidate.
US First Lady Nancy Reagan is quoted as having told a friend that her husband is being assailed by “1,001 arrows”, many of which she believes have been fired by her own side of politics. She is said to be concerned about the health of the President but has praised the new White House staff as “sincere and thorough” in contrast to former White House Chief of Staff Don Regan, who she calls a “bumbling and insensitive fool”.
After Reagan is called upon to answer further questions, a Democratic senator anonymously leaks an alleged conversation with the US President in which he said that the President could not recall a lengthy meeting with him three weeks previously. He suggests that the trauma of surgery has caused a noticeable deterioration in the President’s physical abilities and states he should retire before he is torn down by the Washington “pack dogs”.
Leaks from the CIA show that, in 1985, the organisation had worked with the National Security Council to plan a joint US-Egyptian invasion of Libya. The leak also states that the plan was crushed by intervention from US Secretary of State George Schultz. Moderates within the Republican Party begin to discuss Schultz as a potential presidential candidate; however, Schultz will refuse all attempts to conscript him.
Group of Seven finance ministers meet in Paris to discuss the continued dive of the dollar. Federal Reserve Chairman Walter Wriston warns that the fall must be halted, that the increased cost of imports is threatening to undercut the efforts to control the US trade deficit and that this will, is turn, fuel domestic inflation. Japan refuses to intervene, arguing that attempting to prevent the rise of the yen would undermine its own economic needs.
Former US President Richard Nixon is named as the White House’s new chief arms negotiator after President Ronald Reagan states his intent to conclude a successful arms reduction agreement on long-range missiles with the Soviet Union.
US President Ronald Reagan addresses the people. He states that his ongoing ill health continues to pose a problem, but that he does not feel that it has yet prevented him from fulfilling his role as President. He comments on the breakdown of Iran-Iraq peace talks and pledges to build an international coalition of nations to force both nations back to the table.
US President Ronald Reagan addresses the people. He states that his ongoing ill health continues to pose a problem, but that he does not feel that it has yet prevented him from fulfilling his role as President. He comments on the breakdown of Iran-Iraq peace talks and pledges to build an international coalition of nations to force both nations back to the table. US Congress Richard Gephardt announces his candidacy for the Democratic nomination for President in 1988. He has visited Iowa nearly thirty times in the past two years and one of the primary proponents of the tax bill of 1985. On the same day, Illinois Senator Paul Simon announces that he will not be a candidate.
Howard Baker, the former Senate Minority Leader and the holder of the President Medal of Freedom, announces that he will run for the Republican nomination for President in 1988. Known in Washington as the “Great Conciliator” for his bipartisanship, Baker has a lot of support among Democratic voters and is seen as a solid threat to both Vice President George Bush and to any future Democratic nominee.
US Federal Reserve Chairman Walter Wriston upgrades GDP growth projects, stating that they will now be 2.6% (down 0.1% from December’s projection). He pledges, however, that the pace of growth will pick up and that, by year’s end, it will be progressing at a rate of 3.4%. Treasury Secretary James Baker, who is present at the press conference, states that he has arranged for an injection of funds for the Lima Group in order to convince them to release their suspension of debt payments and keep international credit markets afloat.
The Special Prosecutor, Wade McCree, issues a statement on the Nicaraguan contra deal, stating that President Ronald Reagan has “abdicated principal responsibility for policy and implementation to his advisors, without making any attempt to critically review the participants or processes.” He states that the President has “repeatedly proceeded with concepts that are not accurately reflected in reality”.
There are calls for the removal of Arizona Governor Evan Mecham after he cancels Martin Luther King Day in the state and following a number of failed appointments. Arizona House Minority Leader Art Hamilton states that he will support a campaign to recall the Governor from July, when state law permits.
It is confirmed that investigators into the Reagan Administration have offered former National Security Advisor, Admiral John Poindexter, immunity from prosecution in return for turning evidence against his former colleagues. Former contra leader Adolfo Calero is giving evidence today that money from the Administration was “cleaned” by channelling through Republican Party fundraiser accounts and through the assistance of the Saudi royal family.
US President Ronald Reagan gives an interview in which he admits that “the best of intentions had failed”, as he had allowed his “personal concerns” to cause him to make mistakes. He admits to “failures in management style” and “disappointment in those who have served him”.
New Jersey Senator Bill Bradley (D) states that President Reagan had failed to dispatch his doubts about capacity during recent discussions. Congressman Barney Frank (D-MA) is even blunter, saying that “Reagan is a great orator, but a lousy President”. Only Senator Alan Simpson (R-WY) comes out to insist that the Administration is “on the verge of an uptick”. Press Secretary Marlin Fitzwater insists that the President is “energetic, engaged and in command of the details”. However, long-time advisor, former Senator Paul Laxalt (R-NV) states that the President need to admit that his policies, not his management style, were flawed.
Texas Governor Bill Clements (R), elected last November by just a margin of just 0.7%, admits that, as Chairman of the Board of Governors of Southern Methodist University, he ran a slush fund to pay football players for the Mustangs in violation of the rules of the athletic association. The resulting penalties will end the reputation of the Mustangs as a team, and will overshadow the Governor’s next four years.
OPEC announces a decrease in production as the oil glut continues. The bloc is now producing at just above 60% of capacity. US Secretary of the Interior Donald Hodel recommends that the Reagan administration should take the opportunity of expanding the Strategic Petroleum Reserve from 100 days of supply to one year of supply (not including private sector inventory) in order to prepare for any future oil shocks. However, to prevent budgetary overrun, Hodel also recommends that the nation should contract for fixed prices. As a result, the total US reserve will rise from 700 million barrels to 975 million barrels by the end of the century (roughly 140 days of supply at that time).
US Republican presidential nominee, former Senator Howard Baker, is asked to explain supposedly off-record remarks to a journalist earlier this month that President Ronald Reagan’s memory had “a short half-life” and that his wife, First Lady Nancy Reagan “can be a dragon”. He implies that his own memory and everybody else’s is potentially suspect and that the First Lady is “a lady with very strong convictions”. Baker is today on Capitol Hill meeting with various conservative Republicans to assure them of his own credentials. Former Transportation Secretary Drew Lewis has come on board to coordinate the Baker campaign.
The notorious “Pizza Connection” mafia trial comes to an end in New York, with seventeen found guilty of conspiring to distribute heroin and cocaine through a network of pizza restaurants. Those convicted include the former head of the Sicilian mafia and US Attorney Rudolph Giuliani states it is a “tremendous victory” and that joint efforts by US and Italian officials was “building momentum towards the massive destruction of the Mafia”.
Former White House Chief of Staff Don Regan is indicted for lying to federal investigators and conspiracy to pervert the course of the Irangate inquiry. President Ronald Reagan is named as a potential conspirator, but is not indicted, with the Special Prosecutor stating there is insufficient evidence to convict. There is increasing suggestion that the Administration may not survive the coming year. On the same day, Assistant Secretary of Defence Richard Perle resigns from the Administration, but states that it has been long planned and is not a response to any current events.
New York Times columnist William Safire suggests that First Lady Nancy Reagan has become “an incipient Edith Wilson, unelectable, unaccountable and extraordinarily vindictive”.
Members of the National Security Agency, including Commander Oliver North, are indicted over their links to the President of Panama, General Manuel Noriega, renegade elements of FARC and the Mendellin drug cartel. The United States imposes sanctions on Panama. Republican presidential nominee, Peter du Pont, condemns conservatives for their attempts to turn AIDS into a political issue, stating “it is a medical problem, not a moral one”. He states the threat of AIDS has been contained with medical advances and that “promoting safety for our children does not amount to teaching sodomy”. He calls those pushing such agendas “threats to public safety” through their “uninformed views”.
Televangelist Jim Bakker is disgraced after it is revealed he paid $280,000 to avoid public allegations of rape. It marks the beginning of a long decline for the once-popular leader of PTL Ministries, who will eventually be imprisoned for a period of five years. His wife, Tammy Faye Baker, will maintain her celebrity in popular culture, eventually becoming a spokesman for cancer sufferers and promoting reconciliation between the gay and Christian communities.
Police in New York arrest over forty people at JFK Airport, after it is revealed that baggage handlers for Pan Am, Eastern and Delta airlines have been running a cocaine smuggling ring. They are estimated to have smuggled in billions of dollars since 1981.
Amidst allegations of the beginning of a new Mafia war, godfather John Gotti of the Gambino family and his associate Angelo Salvatore Ruggiero are shot down by a drive-by as they leave their vehicle outside a bar owned by the Mafia. Gotti had gone to the bar to celebrate his recent exoneration on trafficking charges.
A series of senators begin to make their journey to 1600 Pennsylvania Avenue. Senator Sam Nunn compares Reagan to Johnson and Nixon, stating that his visit was to tell the President that he has crossed the threshold of mismanagement and is being called to account. It is believed that the House of Representatives will be in position to pass the articles of impeachment within the next month.
Former Arizona Governor Bruce Babbitt announces that he is running for the US Presidency, joining Richard Gephardt of Missouri, Joseph Biden of Delaware and Gary Hart of Colorado. Babbitt is not considered the equal of the other three, mainly due to verbose speaking manner, but hopes to be a “dark horse” eventual winner. On the Republican side, the clear candidates are Jack Kemp of New York, George Bush of Massachusetts, Robert Dole of Kansas and Howard Baker of Tennessee.
Les Miserables opens on Broadway with advance ticket sales of $11 million, the most in US theatre history and nearly double the record set by Cats in 1982. The show, based on the 1862 novel by Victor Hugo, has already scheduled openings in Japan, South Africa and the Soviet Union.
Congressman Newt Gringrich (GA-R) calls for Senate Minority Leader Robert Dole not to run for the Presidency, arguing that his endorsement of food stamps, the Martin Luther King holiday and upper income tax increases in 1982 and 1984. Dole is a serious contender now due to questions of integrity over Vice President Bush, but the presence of his wife, Elizabeth, in the Cabinet, means he is delaying his formal announcement as long as possible.
Republican activists, interviewed by the Washington Post, admit that US President Ronald Reagan is “finished” and that his Administration has become “a bizarre shambles” after the President stumbles during a press conference. Moderate Republicans state that it offers the opportunity for a more “actively compassionate approach”, pointing to neglect of homelessness, the ominous national debt, rising conflict with Japan and failure to understand the evolution of new social values. The Post backs up the interviews with polls showing that 70% of respondents believe taxes should rise to balance the budget and to restore social spending cut by Reagan, but most express concern of a return to the Great Society style of welfare. The op-ed piece suggests that “as the rest of the world begins to harness the power of market incentives and entrepreneurship”, the US government should focus on “turning back the bloated, greedy and stagnant corporations and rebuilding our crumbling school systems”.
Former White House Deputy Chief of Staff, Michael Deaver, is indicted for perjury by the Special Counsel, having allegedly lied to both the grand jury and a congressional committee.
Massachusetts Governor Michael Dukakis declares that he will run for the 1988 Democratic presidential nomination. While he is the only north-eastern candidate, there are immediate questions about his lack of foreign policy experience and his ability to win votes in the South.
General Alexander Haig, former Secretary of State, announces that he will contest the Republic presidential nomination, stating that the scandals which have enveloped the Reagan Administration are proof that the nation needs a “strong foreign policy leader and a Republican who isn’t fiscally flabby.” Many journalists suggest the campaign should make good copy.
Admiral John Poindexter tells the Special Counsel that he kept President Ronald Reagan fully informed, and so had his predecessor. “I had authority, directly and indirectly, for everything I did”. Asked if he was sure he had kept Reagan advised, he states that he had fully briefed the President at least twice on the plans for Nicaragua.
Democratic Senators John Kerry (MA), Ernest Hollings (SC) and Joseph Biden (DE) savage Secretary of State George Schultz on the floor of the Senate Foreign Relations Committee room, claiming he has politicised his legal office. Schultz claims that Biden is being “malicious” in an effort to give himself headlines in his presidential nomination bid.
Senator Al Gore of Tennessee declares his intent to run for the Democratic nomination. Aged thirty-nine, he is a well financed candidate with strong support, but questions remain as to whether he will be contested by Arkansas Governor Bill Clinton.
The US government privatises the Conrail network in the largest IPO in US history, selling it off to a share battle between CSX and Norfolk Southern. Family investors make an automatic nine percent uptick on share value.
Senator Edward Kennedy (D) calls for an immediate rise of the minimum wage to $3.70, stating it is no longer reasonable for full time workers to be unable to meet basic necessities. Republicans strongly oppose the motion, stating that it will destroy low-wage jobs for teenagers.
It is announced that the Rendon Group has been paid a retainer of $20 million by the Union Bank International to help “polish up the corporate image” without sacrificing the hammer and sickle. Conspiracy theorists claim it is yet more proof of the links between Communism and the US Democratic Party, of which John Rendon was once an executive director.
US President Ronald Reagan travels to Missouri to meet with Governor John Ashcroft (R). The press are calling it the “Farewell Trip to the Heartland”, as rumours abound that the journey, accompanied by Education Secretary William Bennett, will be Reagan’s last as President. Former Senator Howard Baker turns up to support the President.
The US Supreme Court rules by 7-1 majority in favour of affirmative action. Associate Justice Sandra Day O’Connor, writing the judgement, gives her opinion the clarification that “government may treat people differently because of their race only for the most compelling of reasons” and suggests that affirmative action can only be legal when they are “expressly designed to correct specific instances of past discrimination. This ruling is used as a benchmark for future decisions on the subject. Attorney General D. Lowell Jensen expresses “disappointment” at the decision.
Former senator Howard Baker is said to be working closely with US Chief of Staff, Kenneth Duberstein, and a number of other presidential advisors, on his campaign. Representative Jack Kemp questions the use of government resources for political purposes, while Vice President George Bush states that, having “given up his neutrality”, former Senator Baker must end his close ties to White House staff.
US President Ronald Reagan states that it is vital to the long-term future of the nation’s security that Congress and the Executive work together to resolve the long-standing disagreement over Social Security. He points to the major steps of his Federal Insurance Contribution scheme as one of his proudest legacies and states that the nation can go still further.
US Representative Jack Kemp, known for his staunch economic position on tax cuts and currency reform, promotes the idea that the Republican Party must reach out to minorities, women, blue-collar workers and even organised labour during his formal entry into the presidential race. “I have been a long-time supporter of civil rights,” he states, “and it was a historic mistake that we were not at the forefront of the movement.”
The US Congress overrides the Presidential veto on an $88 billion highway bill by 67 votes to 33, an unwelcome reminder of the White House’s weak political condition. Senator Arlen Specter of Pennsylvania leads the rebellion by Republican moderates and open speculation on how loyal Senate Republicans are to the President, who is facing a vote on impeachment proceedings in the House within the next fortnight.
New charges are laid against former US Attorney General Edwin Meese over allegations he took bribes to overlook abuse of a government grants program on behalf of a New York company. The charges will never make it to prosecution due to a presidential pardon for Meese.
The term “dink” is adopted by psychologists to describe an increasing trend among urban professionals not to reproduce.
Senator Al Gore of Tennessee tells the nation that his “youth, vigour and intellectual capacity” will turn the nation around. As it stands, Gore is expected to win a sizeable chunk of the votes in the Southern regional primaries, nearly 30% of the whole. On the same day, polls in the Midwest show a higher than expected support for the candidacy of Reverend Jesse Jackson after the civil rights leader states that he is a “true liberal”, not a “new liberal”.
Comedienne Tracey Ullman uses her show to introduce a series of animated shorts on a dysfunctional family. The Simpsons will go on to become the longest-running series in US television history and will be responsible for the introduction of the words “D’oh” and “cromulent”, and the phrase “cheese-eating surrender monkeys” into the English vocabulary.
The founding company of the US oil industry, Texaco, files for bankruptcy with $19.6 billion in debt, the largest bankruptcy in US history. Most of its major assets have been sold over the past two years after a failed, expensive takeover bid and a long civil case against Pennzoil. The major victors are Mobil and the Saudi state oil company, Aramco. Banks and other business partners, such as Chase Manhattan and SCE, turn their banks on the Texaco star.
Figures from the US House of Representatives make the journey to the White House to advise that they cannot stop the process for indicting the President. The First Lady, Nancy Reagan, advises her husband that he should step down and pardon those who have followed his orders. That evening, the White House issues a series of pardons covering all the members of his Administration for any activity undertaken at his request. He also gives an address to the nation, where, citing ill health, he states that he will resign the Presidency from noon tomorrow.
George H.W. Bush is sworn in as the 41st President of the United States, as Ronald Reagan departs aboard Marine One for California, remembered as a leader with enormous potential who pushed the Soviet Union towards peace, became the 2nd US President to win the Nobel Peace Prize, and was led astray by an inner circle who abused his trust. President Bush states that there is no need for a presidential pardon for his predecessor and suggests that the office of the Special Prosecutor, Wade McCree, can now be shut down.
After nearly a month in hospital, American pop artist Andy Warhol passes away in New York, aged 59.
Mellon Bank Corporation announces a loss for the March quarter of $60 million and admits that it holds nearly $1.5 billion in write-offs and non-performing loans. Mellon’s shareholders are heavily invested in the energy sector, which has been in the doldrums for many months, as well as real estate in Dallas and the Latin American sector.
US Defense Secretary Richard Cheney proposes the construction of two new Nimitz class ships to allow the retirement of all aircraft carriers outside that class by the end of the century. It is agreed that the first, later known as the USS George Washington, will be finished by 1994, and that the second, USS Harry Truman, by 1999. By starting immediately, rather than delaying as originally planned, he suggests that the Navy will be able to save $3 billion over the next decade.
Senator H. John Heinz III of Pennsylvania is named as the new Vice President of the United States. The swing state Senator is photogenic, young and independently wealthy. President Bush also announces that he will retain Kenneth Duberstein as his Chief of Staff, stating that the country does not require any further disruption to the Administration, and that, for the time being, all current Cabinet members will be retained.
Police shoot and kill a man outside a shopping centre in Palm Beach, Florida. They say the victim, a local man with a reputation for being a crank, had rung the police in an inebriated state, warning of his intention to go on a shooting spree at the local mall.
Polls in the US show that former Senator Gary Hart has a 32% lead over his nearest rival for the Democratic Party nomination. However, analysts state that his two marital separations, his repeated lies about his age and his debt of $1.5 million from the 1984 campaign have already been raised in the media and are beginning to gain traction. Despite his popularity, the elders of the Democratic Party are hoping that a “dark horse” will emerge to challenge his dominance.
Responding to the falling dollar, and the decline in securitisation take-ups, US Federal Reserve Chairman Walter Wriston announces that interest rates will be increased from 6% to 7%, pushing the general mortgage rates to over 10% and increasing average monthly housing repayments up by about $75. Housing starts have already begun to fall, and Treasury Secretary James Baker is privately concerned that a falling dollar and increasing rates may trigger an economic slowdown.
US President George Bush announces that, from 5 May, up to 2.5 million illegal immigrants will be able to “emerge from their shadowy half-lives into the sunshine of citizenship”. Aliens who have lived and worked in the United States since 1982 will have amnesty to apply for permanent status. He also announces a massive sting operation by the Immigration Service to “clean out” the hiring of remaining illegals and fine businesses involved. Catholic authorities endorse the move heartily, but business complains that they are forced to become INS agents, while some Republicans complain that it will drive up bureaucratic costs in the short term.
US Interior Secretary Donald Hodel announces his retirement. It is widely speculated that President Bush has pushed the Secretary in order to make way for his former Congressional colleague, Manuel Lujan of New Mexico, one of the inaugural members of the Hispanic Caucus. He will be easily confirmed by Congress.
Democratic presidential candidate, Representative Richard Gephardt of Missouri, calls for the introduction of new protectionist trade measures. He states that the free-trade views of former Senator Gary Hart means potential for the party to “simply echo the Republican Party and offer nothing new”. Hart responds that he prefers “working with the other side towards bipartisanship” and that he will not “sacrifice American interests for short-term political gain”. President Bush uses the opportunity, when questioned on the matter, to remind the nation that Senate Minority Leader Robert Dole is “a bit like Gephardt – all over the map on trade”.
New Jersey Governor Thomas Kean (R) calls for a national recycling program, stating even the most basic separation of materials would reduce waste by 25% across the country. “The nation is choking on its own garbage,” he said, “and, without national action, things will only get worse”.
United Bank of Houston, with assets of $212 million, is shut down by the FDIC after it is confirmed it can no longer deal with the bad loans and the drying up of capital. The bank has been losing over a million dollars each month. Among the assets seized are the CEO’s corporate helicopter and Mercedes, a penthouse with sauna and crystal chandeliers, and ostrich-skin covered furniture.
Mortgage securities bosses at Merrill Lynch admit a loss of $256 million after recent increases in US interest rates cause a fall in the value of mortgage-backed bonds sold by Ginnie Mae (the Government National Mortgage Association).
Former Senator Paul Laxalt, one of Ronald Reagan’s closest friends and advisors, announces that he is running for the Republican Party’s presidential nomination. Governor Michael Dukakis (D-MA) states that Laxalt is a “occasional hired hand who thinks he can be the foreman”.
US Secretary of State George Schultz offers his resignation to President George Bush, allowing the promotion of James Baker into the position. The new Treasury Secretary is former New Jersey senator, Nicholas Brady. Schultz will move to Stanford University to lecture and serve as a director of the Hoover Institution.
US presidential candidate Jesse Jackson states that the primary problem facing African Americans is not racial discrimination or welfare dependency, but rather the fall in industrial jobs and the rise of professional jobs in the economy. He states that educational disadvantage has perpetuated social disadvantages and that lack of employment by black males has meant black females have chosen the more economically viable choice of not marrying. He also points out his belief that creating jobs for those on welfare merely reduces minimum wage jobs and suggests that the key elements for a positive future for African Americans is “priority to education, child care and employment training”.
More than two years after the event, subway vigilante Bernhard Goetz stands trial before a New York jury. The question is whether he was a victim facing imminent attack, or a trigger happy racist looking for whatever could pass as provocation. He will later serve eight months for carrying an unlicensed and loaded weapon in a public place, but will emerge as a popular hero credited with starting the groundswell against New York crime that will make it one of the safest cities in the United States.
Wyoming Senator Alan Simpson (R) is quoted as stating that presidential candidate Howard Baker is an “innately civil and kind gentleman” and predicts that it is unlikely that the Oval Office will change him. It is the first sign that the process of endorsements may have already begun in earnest.
Former CIA Director William Casey takes many details of the Nicaraguan and Iranian scandals to his grave. Reagan’s chief spy died of pneumonia.
As part of budgetary planning, the US Congress proposed that an additional 50 cents on a bottle of wine would raise $4 billion and a 20c increase in cigarettes will raise $3.5 billion. The Senate has suggested tax increases of $19 billion in this year’s budget, but White House Press Secretary Marlin Fitzwater states, “The President does not agree that new taxes are necessary. Period.”
Firestone Tire and Rubber Company CEO John Nevin announces that the company is moving from its home at Akron to the city of Chicago, allowing the company to cut 450 jobs. It sends shockwaves through Ohio’s manufacturing sector, who fear that even this desperate measure will not save the financially moribund company.
US film goddess Rita Hayworth, former wife of the Aga Khan, passes away in California at the age of sixty-eight. Her daughter, Princess Yasmin, becomes a major benefactor for the Alzheimer’s Association in recognition of the disease which claimed her mother.
US Drug Enforcement Agency chief Jack Lawn describes, as “remarkable”, the largest and most successful undercover drugs operation in US history. Over three hundred fifty people are arrested, taken by police along with $320 million in cocaine. Lawn also states that the government has firm details on a further $50 million in cash and the measures by which it was laundered.
The Federal Savings and Loan Insurance Company admits that it is $6 billion in the red and haemorrhaging at the rate of $3.8 billion per annum. While there is a high level of awareness that the FSLIC has been intervening, since early 1986, to help insolvent institutions which invested in high-yield, high-risk junk bonds, they now admit that their resources are inadequate to the task. They ask Congress for an immediate $5 billion in extra funding, plus an additional $15 billion over five years to enable recapitalisation. They will agree almost unanimously to the immediate infusion and an extra $7.5 billion fund as required. President George Bush states that he will put legislation before the Congress to resolve the matter fully within the next three to six months.
The Miami Herald claims that Democratic frontrunner, former Senator Gary Hart, spent last weekend on a yacht with a 29-year-old part-time actress and topless model.
Despite the weak dollar and falling bond prices, US Treasury Secretary Nicholas Brady announces that unemployment dropped in April. At 6.5%, it is the lowest level since 1980 and Lehman Brothers economists state that the economy is “stronger than anyone thinks”. However, there are concerns that the Federal Reserve may again raise interest rates to defend the dollar and contain inflation.
Gary Hart announces that, after days of ignoring allegations regarding martial impropriety, he is withdrawing from the race for the Democratic Party nomination. It leaves the Rev. Jesse Jackson as the only candidate with an established national reputation. The majority of Hart supporters state that they will not endorse any other candidates currently in the race, instead calling for the entry of New York Governor Mario Cuomo, New Jersey Senator Bill Bradley or Georgia Senator Sam Nunn.
After wholesale prices rise in April by 8.6% and industrial production falls by 0.1% over the same period, the Dow Jones Industrial Average falls to 2204.34 points. It is now down over 110 points from its peak in early April. With such a mixture of good and bad news, other economists point to increase in growth, which has now moved to an annual rate of 4.3%. Walter Wriston, the Federal Reserve Chairman, hints that, until greater certainty emerges, interest rates will need to be held at current levels, regardless of pressures on the dollar.
Many US Presidential candidates refuse to discuss adultery, instead choosing to discuss whether it is a legitimate campaign issue. Questions are raised about rumours of infidelity surrounding President George Bush, Rev Jesse Jackson and Representative Jack Kemp, while questions of integrity also attach themselves to Senator Paul Laxalt and Rev Pat Robertson over non-marital issues.
The Iowa coordination team for Gary Hart meet in a breakfast with Delaware Senator Joe Biden. However, his political director moves to work on the campaign of Governor Michael Dukakis. It provides some indication of the way in which the Hart supporters may split, and moves Dukakis and Biden into the new position of front-runners.
Citicorp chairman John Reed criticises the Federal Reserve, stating that his predecessor, Walter Wriston, had responded “too much, too fast” to the threat to the dollar with his 100 basis point rise in interest rates. He also declares that his company will set aside $5 billion in reserves to cover the cost of bad loans to Latin America, giving Citicorp its first annual loss since 1934, but “significantly strengthening the institution as a whole”. He warns that the corporate banking community is running out of patience with the Administration over the issue and demands an immediate resolution from new Treasury Secretary, Nicholas Brady. Brady, in turn, suggests that “positive steps” to resolve the stand-off with the Lima Group will shortly be forthcoming.
President George Bush announces that he has asked George Allen, the chairman of the Council on Physical Fitness and Sports, to find a way to institute thirty minutes of physical exercise into the school system on a daily basis. He expresses concern that the Soviet youth fitness test, recently delivered to 20,000 students, was passed completely by only 250.
US President George Bush comments on the actions of his predecessor in Iran and Nicaragua. Drawing comparison to Franklin Roosevelt’s decision to give aid to Britain during World War II, he states that “when the forces of democracy are in moral peril and Congress is being intransigent, a courageous President must act in the cause of freedom”. He also states that President Thomas Jefferson did not consult Congress before the Louisiana Purchase and “that bold action, against insular political concerns, secured the future of this nation”.
Australia’s richest man and recent purchaser of the Herald and Weekly Times, the nation’s largest media group, Robert Holmes a Court, is confirmed by the Securities and Exchange Commission to be the major new investor in US industry. Holmes a Court, who is also a substantial shareholder in BHP, Australia’s enormous steel, oil and gas group, announces that his Bell Resources Group has taken a 19.2% share in Texaco and a 15% stake in US Steel. He states, “The intrinsic value of Texaco’s assets is substantially higher than views expressed by others. I have no doubt that Bell will benefit from this stock over the long-term.”
US President George Bush tours farm communities in west Texas devastated by cyclones five days ago. He is advised that more than 15% of the region’s population has been lost and more than half of the population is currently hospitalised. Bush pledges to rebuild the region with federal funding. He also expresses concern, in El Paso, that the region has recently lost over five thousand manufacturing jobs, all of which have headed directly over the border into Ciudad Juarez, Mexico.
With the fall of Gary Hart, New York Governor Mario Cuomo makes a visit to Iowa and reports surface that he has hired staff to begin soliciting money for a campaign. After many questions, he backs down from his previous statements and states that he cannot categorically rule out the possibility of entering a primary. A third of Democratic Party members indicate that they would vote for Cuomo as candidate should he enter the race.
US President George Bush flies out on his first international trip, to meet with King Fahd of Saudi Arabia. He proposes to the Saudis that they buy fifty F-15E Strike Eagles, not for cash, but for a guarantee of delivery of oil into the US Strategic Reserve. This has been sold to key Congressional leaders as a means by which the expenditure can be removed from the Budget process. He also travels to Kuwait to attend a memorial service for those killed in the recent terrorist attack on GULCOFOR troops.
US Secretary of Defence Richard Cheney announces the establishment of a new clearing house for journalists and scholars researching issues relating to national security. He states that, as the Freedom of Information Act excludes many items relating to the subject, the new archive will automatically receive all information that has been cleared for public consumption. Some analysts suggest cynically suggest that the Defence Secretary is merely setting up his own system to control the Administration’s release of information and prevent another scandal. 2 June
Former US Labor Secretary Ray Donovan, indicted in 1984, is cleared of all charges due to a lack of credible evidence connecting him to mobsters. President George Bush states that “Ray was always a man of integrity, and I’m happy to see that proven in court.
Citigroup’s subsidiary, Primerica, pays a bargain $750 million to takeover of leading Wall Street brokerage firm, Smith Barney. The brokerage had revenues last year in excess of $1.1 billion.
US Treasury Secretary Nicholas Brady announces that he intends to close the “loophole” of the Tax Reform Act of 1985, which has allowed the emergence of home equity loans. He warns that, being tied to the prime lending rate, repayments will fluctuate enormously over the life of the loan and that banks have failed to disclose that low “teaser” rates will be increased, encouraging “frivolous consumption”. The new legislation will demand a fixed five-year rate and will limit lending to 70% of appraisal value (rather than the current 80% bank standard).
US President George Bush states that next week’s G7 summit in Venice will focus on how to reduce US indebtedness and to boost economic growth concurrently in all economies. He also warns Wall Street that massive rises in the price of shares are unsustainable, pointing to the Dow Jones close yesterday of 2222.83, which, while 80 points below peak, is still well above price-to-earnings ratios. Nonetheless, he points to two positive indicators: 1) the US current account deficit is progressing downward, falling from $173.5 billion last year to an expected $153.2 billion this year and 2) the budget deficit will fall from $228 billion last year to a projected $167 billion this year. He praises Japanese efforts at stimulus, but calls on West Germany to increase government spending to increase capacity.
New US Treasury Secretary Nicholas Brady states that he expects to have an agreement from debtor nations by the end of July. “The wholesale default of debtor nations is no longer a real possibility,” he claims. Brady is said to have a close relationship with the President and unlimited access to the Oval Office, mainly thanks to the efforts of Secretary of State James Baker.
Responding to questions about his Middle East policy, President George Bush expresses that the Gulf Cooperation Taskforce will be expanded to include a larger naval component, rising from six ships to ten. The ships will all contain Aegis technology and will be stationed across the Strait of Hormuz, preventing any repeat of the 1985 crisis. He also pledges that the security zone surrounding Kuwait will become part of Kuwait, rather than part of the new state of Sumeria, and that Kuwait will be permitted to exploit the oil resources of the zone. A greater number of AWACs will be transferred into Oman.
US President George Bush announces the suspension of programs run by the Small Business Administration for the establishment of minority-owned businesses. He explains that one in five of them are false-front companies, purported to be controlled by minorities but actually owned by whites, and that, of the legitimate businesses, over half had gone out of business within a year. “A 30% success rate and high rate of corruption does not equate to fostering entrepreneurship,” he states. He projects that this will save $4.2 billion from the budget deficit. 10 June
US National Security Advisor, General Colin Powell, states that his agency has tracked down $23 million in overseas accounts, with the signatories including Lieutenant Colonel Oliver North. He says that this is evidence that the NSC is restoring its integrity and effectiveness and deserves a higher level of confidence among the US populace.
The Washington Post attempts to make a connection between recently pardoned arms dealer Edwin P. Wilson, and his former boss at the CIA, President George Bush. Wilson is now living abroad. The White House claims the Post is slanderous and Press Secretary Marlin Fitzwater states that the “liberal press should put up evidence, rather than attempting to slur the President”.
US Attorney General D. Lowell Jensen announces that all federal prisoners will be required to undertake AIDS tests upon entry and every two months thereafter. In addition, all immigrants seeking residency will be required to undergo a similar test in order to gain a permanent visa.
The Interstate Bank of America, the nation’s second largest bank, declares that it has a second quarter loss of $1.1 billion, the largest in its history. Charles Schwab states that the company ran an operating profit, but had decided to set aside assets in case they should be required to bear more defaults by Latin American borrowers.
The US Supreme Court decides that teaching creationism is unconstitutional in any school that receives state funding, because it must be regarded as an attempt to advance a particular religion. It permits state and independent schools to teach “scientific critiques of prevailing scientific thought, provided it is done with clear secular intent”; but it clarifies that creationism and intelligent design are religious teachings and are not “areas of legitimate scientific research”. This creates outrage in the Republican Party base, who argue that the Supreme Court is threatening traditional Christian practice.
US Senate Majority Leader Robert Byrd announces a new labour agenda for the Congress, including resolving the long stand-off over the minimum wage, mandating new compulsory health care benefits for workers and guaranteeing job security and parental leave for new parents. Companies insist that this will drive up costs even further when they are struggling to compete against cheap overseas manufacturers. The most controversial proposal is that companies will need to provide employees with six months notice of plant closures and substantial layoffs, something that President George Bush states he will veto. USX, the steelmaker, states that such laws would have required it to consult with trade unions nearly thirty times over its last restructure, costing millions of dollars.
US film and Broadway star, Fred Astaire, passes away at the age of eighty-eight. The virtuoso dancer will be acknowledged by future generations for his influence on the development of choreography.
During a television interview, Senator Joseph Biden (D-DE) calls for an America which moves from “dreary materialism to exhilarating activism”, as Republican analysts admit he has the broadest potential base of any Democratic candidate and one of the largest campaign war chests. Biden refuses to discuss whether or not he would be prepared to run with Jesse Jackson. He today is visiting Oregon, where he states that the Republican tough line on immigration has meant that crops rot in the fields rather than being harvested, recommending that seasonal work visas for Mexicans may be the solution.
US Transport Secretary Elizabeth Dole states that private security companies operating at airports across the country will not have their contracts renewed, and that the FAA will assume direct control of security. She cites a recent trial, during which private guards missed concealed armaments and “dummy” bombs 20% of the time, and, in some airports, that rate exceeded 65%.
Rather than allow tax increases, US President George Bush strikes a deal with Senate leaders to cut Reagan’s military proposals by an enormous $19 billion. It puts the Democrats on the back foot, who had been hoping to squeeze the President in order to label him as a “tax and spend” candidate. He then turns the attack on the Senate, calling for them to match the cuts in order to meet the demands of the Gramm-Rudman Balanced Budget Act and threatening to veto the budget if they fail to do so.
The US Congress disagrees with the decision by President George Bush to reverse recent tariffs imposed by his predecessor, stating the need to avoid “an unnecessary confrontation with key allies”.
US Supreme Court Justice Lewis Powell, long regarded as a swing vote, provides notice that he is stepping down. Newspapers declare it a pivotal moment in US constitutional history, pointing out that, given the age of some judges, the next presidential election may be of supreme importance. President George Bush announces the appointment of former Deputy Attorney General, Laurence H. Silberman, to the bench.
US President George Bush leads a ceremony at the Jefferson Memorial in Washington D.C. to celebrate Independence Day. In the muggy heat, he promises to keep his speech short, noting Jefferson’s dislike of long and tedious political speeches. The result is generally assessed as satisfactory.
New internal party polling gives the US Democratic Party some information about negative factors on their leading presidential candidates. Governor Michael Dukakis of Massachusetts is seen as weak on defence; Senator Al Gore of Tennessee is seen too as “South-centric”; Dick Gephardt is supposedly “indecisive”; Senator Joseph Biden “doesn’t represent anything”; Governor Bruce Babbitt is “boring” and the Reverend Jesse Jackson has a reputation as a “limousine liberal”.
US President George Bush meets with Senate Majority Leader Robert Byrd and the two agree to allow an increase in the minimum wage. It will rise immediately to $3.80 per hour, then $3.95 in 1988, $4.10 in 1989 and $4.20 in 1990. In response to the agreement, the US Federal Reserve Chairman, Walter Wriston, projects that he can once again move to lower interest rates without risking inflation.
In Los Angeles, a homeless man is arrested for attempting to sell his HIV infected blood and charged with attempted murder. The District Attorney insists that it is the moral equivalent of poisoning the Tylenol supply and will successfully score a conviction. The man said he knew that AIDS could kill, but thought that “they have drugs for that now”.
A Soviet public health documentary team goes to New York City and demonstrates the ease with which they can “score” marijuana, heroin and crack, all under the nose of the local police. The English language version is sold to Sixty Minutes.
There is a televised debate between the Democratic Party candidates for the US presidential election. At the end of the debate, some pictures stick in the minds of viewers. Richard Gephardt is viewed as competent, but maybe a bit overconfident for claiming victory. Joseph Biden is seen as having a vision for the future, while Michael Dukakis gets labelled as arrogant but experienced. Al Gore is said to have the “confidence of a veteran” but is argumentative. Bruce Babbitt is perceived to be patronising and disrespectful, even though described by some as charismatic.
It is claimed that the amnesty recently issued for illegal immigrants by US President George Bush has led to an increase in the numbers crossing from Mexico. The trade in human labour leads to another eighteen deaths today, as a number of naked Mexicans are found asphyxiated in train box cart.
It is revealed that Kitty Dukakis, wife of Governor Michael Dukakis, was dependent on amphetamines (in diet pills) for over twenty years, but has been “clean” since 1982. It is a carefully timed announcement by the campaign.
US Secretary of Labor William Brock wears attacks for the recent rise in minimal wages pushed through by the Administration. Many companies are stating that the increase will have an inflationary outcome and they are still unable to attract sufficient youth. Summer jobs are going begging, despite 1 15.6% youth unemployment rate.
The US Congress gathers in Philadelphia’s Independence Hall to celebrate their 200th anniversary. The ceremonial sitting marks the Connecticut Compromise, which created the bicameral structure for the Congress that has been imitated by many countries since.
US Senator Joseph Biden is accused of politicising the process of the appointment of Laurence H. Silberman to the Supreme Court after he reveals that the Senate Judiciary Committee will not meet until mid-September. White House Press Secretary Marlin Fitzwater states that the White House is keen to begin the new term of the court with a full bench. Silberman, a former Deputy Attorney General, states that he is not concerned.
The US Federal Election Commission reports that the fundraising efforts thus far by the potential candidates for the 1988 presidential election. President George Bush is well ahead, with $9.6 million. In second place is Michael Dukakis, with $4.1 million. Former Senator Howard Baker comes in third with $3.8 million, followed by Senator Joseph Biden and Jack Kemp, both with $3.2 million, rounding out the top five.
US Defense Secretary Dick Cheney states that the elusive Stealth bomber will be entering production from next year, a good two years ahead of the potential Soviet counterpart. While development costs were $124 million higher than originally projected and cost ten percent more per unit, Cheney claims that the US Air Force will retain a strategic and tactical advantage for at least five years.
The US Federal Aviation Administration announces an investigation of Delta Airlines after a series of mistakes and malfunctions. “A pattern of blunders that call into question Delta’s competence”, is the description of the FAA. In the worst incident, a Delta jumbo went off course and came within twenty metres (65 feet) of a Continental jet.
The Dow Jones Industrial Average closes at 2434.74, meaning that it has risen 25% in the last seven months. The corporate streamlining that has increased company profits and the declining US dollar has dramatically increased export sales. However, there is concern that the market is moving fifty or more points each day, a volatility that is mixed with excitement and fear. There are suggestions that the market is now “wild bull”.
The Republican National Committee reports that it has accumulated $37 million in donations for next year’s campaign; by comparison, the Democrats have raised $22 million. None of this money is specifically for any candidate, but rather for the campaign generally.
Scandinavian retailer IKEA opens its first stores in the United States, with ten thousand people pouring through the two outlets in Philadelphia and Washington during the first day.
Representative Pat Schroeder of Colorado, 47, announces that she will not run for the Democratic nomination. “It’s a lot of work just to be a symbol,” she states in a speech to the National Organisation of Women. She addresses the fact that female university graduates have starting wages similar to male high school dropouts and that, at current rates of improvement, wage equality would not be achieved until 2020.
Former US Secretary of State George Schultz appears on national television and states that he feels he was “humiliated, betrayed and ignored” by “guerrilla warfare” within the Reagan Administration. He comments that the National Security Council and the Chief of Staff “deliberately and systematically deceived me” and that President Reagan “was not given accurate and effective information”. He denies disloyalty, stating that he was always trying to aid the President in “getting all the facts so he could make a wise decision”, but admits he was regularly thwarted.
Republican US Senator, Warren Rudman of New Hampshire, declares George Schultz to be a “real hero” and backs up the former Secretary of State. He reveals that Schultz consulted him on three occasions in 1985 and 1986 to express concern about activities within the Administration that “made him sick to his stomach”. He also claims that Schultz tried to resign on three separate occasions and was “the only completely honourable in that whole mess”.
Former US President Ronald Reagan declines to comment on the recent interview of his former Secretary of State, issuing a simple statement that “I don’t feel that this is the appropriate time to comment”. Recent polls show that three-fifths of Americans believe Reagan did the correct thing in issuing a blanket pardon and shutting down the Iranian and Nicaraguan investigations.
El Salvadoran refugees claim that they have been subjected to threats, violence and assaults by exiled members of the death squads in their former homeland. FBI officials meet with Los Angeles Mayor Tom Bradley to discuss potential ways to eliminate the death squads and offer a reward of $10,000 for each “terrorist”.
US televangelists are horrified by the public leaking of their annual budgets in the press. Topping the list is Pat Robertson, who earned $183 million last year. He is followed by Jimmy Swaggart ($142 million), James Bakker ($140 million), Oral Roberts ($120 million), Jerry Falwell ($84 million) and Robert Schuller ($42 million). Further revelations are made about massive executive salaries and bonuses, multiple homes with gold plated fixtures. Evangelist Billy Graham suggests that the IRS should investigate wherever one family holds a majority control of a religious enterprise or where they refuse to release fully audited financial statements.
Governor Bill Clements of Texas, elected on a campaign of lowering taxes, announces an additional $5.8 billion in taxes to balance a budget hit hard by declining oil and gas revenues. There are concerns among Republicans that the growing unpopularity of the Governor will affect congressional and presidential elections next year in the key state.
US President George Bush announces a new program to begin addressing the need of an estimated 2 million homeless in the United States. It will allow for the construction of new permanent housing and extend the conditions for qualifications for, and per person supply of, food stamps. He expresses concern that such programs have a limited success rate.
US President George Bush announces that he will give federal government support to private efforts to develop superconducting ceramics, including the transfer of $150 million from the defence budget. He projects a computer using superconducting technology within five years and suitability for magnetic levitation by the end of the century.
Federal Reserve Chairman Walter Wriston announces that, due to projected cuts in the federal budget deficit, falls in the trade deficit, a stabilising dollar and resolution of the major elements of the Third World debt dilemma, there is little need to raise interest rates any further. He states that, while inflation is at 5.1%, core inflation is less than 4% and thus not a cause of concern. He also states that annualised growth is at 3.5% but warns there are signals that business and consumer spending may fail to take up the cuts in government spending. In such an eventuality, it is more likely that interest rates will fall.
New polling out today shows that US President George Bush has gained a popularity rate of 50% for the first time as undecided voters begin to warm to the new incumbent. Chief of Staff Kenneth Duberstein predicts that, as attention continues to move away from the Reagan legacy and on to issues that favour the White House, the popularity will continue to rise.
The former Treasury Secretary and three-term Texas Governor, John Connally, applies for Chapter 11 bankruptcy and announces the liquidation of his $300 million real estate empire. The fall in oil prices has depressed Texas’ real estate market and, in doing so, sent the heavily-leveraged company assets into free fall as well.
The Dow Jones Industrial Average closes the day at 2504.91, the first time that the index has passed 2500 in its history.
Union Bank International requests consent to buy a 15% stake in Boeing, stating that its current price of $53 per share is well below UBI’s estimated value of $75 per share. Boeing responds immediately, announcing a buyback scheme for its stock to prevent UBI or any other investor from taking a significant share. When Defense Secretary Richard Cheney suggests that Boeing’s military output makes such a buy impossible anyway, UBI withdraws its request.
US Commerce Secretary Malcolm Baldrige passes away after an injury during a rodeo in late July. US President George Bush describes Baldrige as “direct and unpretentious” and expresses his gratitude for his service. Replacing him will be the director of the President’s re-election finance committee and a member of the Advisory Committee for Trade Policy, Barbara Franklin.
Senator Al Gore of Tennessee breaks with other Democratic candidates to declare his strong support for the US intervention in the Persian Gulf and the Middle East generally. Citing his record in Vietnam, he criticises his competitors stating that, “Talking tough does not substitute for credibility and a willingness to fight for something you believe in.”
US Interior Secretary Manuel Lujan proposes to cancel the Auburn Dam project north-east of Sacramento, saving nearly $300 million by replacing it with flood control measures on the American River. Folsom Dam is raised by three metres, levees strengthened and the capacity of its outlets improved.
The Centre for Disease Control in Atlanta notes that the rate of AIDS infection among homosexual men is in steep decline, but has substantially increased among minorities. African Americans are being infected at twice the rate of whites, while Hispanic rates are even higher still. It is also affecting the military, with black applicants four times more likely to have the disease than whites. They call for a massive expansion of the methadone program to ensure addicts can get clean needles, a call endorsed by Governor Mario Cuomo of New York who immediately orders funding for ten thousand more places.
US President George Bush outlines a new executive order to prevent a repeat of the Iranian and Nicaraguan controversies which claimed his predecessors. He states that all external covert actions would need to be in writing to the National Security Advisor, as well as the Secretaries of State and Defense. The ranking members of the Senate Intelligence Committee would need to be advised within 48 hours of any initiative and all covert actions would be reviewed annually by the whole Committee.
The US Congress rejects a new piece of legislation to continue the rolling deregulation of the banking industry, citing the recent hiccups in the savings and loan industry. More investigation of the industry has produced estimates of a $40 billion liability. However, Congress does agree to changes relating to cheques, stating that banks have been holding funds for periods of up to two weeks. From 1 September, they will need to process all cheques within two working days.
Liberal activist groups in the US take out newspaper ads against the nomination of Laurence H. Silberman to the Supreme Court, suggesting that he is too close to the White House. It is generally believed that Silberman will be in the same mold as Chief Justice Rehnquist and Associate Justice Scalia, something which the Democrats are unlikely to welcome.
Rev Jesse Jackson, interviewed in New Hampshire, states that he has become more “reasonable and mature” since 1984. He criticises a question which draws attention to his broad African American base, stating that “Mike Dukakis doesn’t worry just about Greeks and Al Gore doesn’t worry just about white southerners.” Nonetheless, he admits to his status as an outsider within Democratic politics and his suspicions that, while many blacks support him, most of the black leadership does not.
ABC admits to paying $100,000 to model Donna Rice for a “tell-all” on her affair with former Senator and presidential candidate, Gary Hart. There are also suggestions that Cheryl Ladd could star as Rice in a telemovie based on the latter’s life.
The term “road rage” enters the general vocabulary after Californian drivers begin to report that increasing numbers of Americans are taking their guns on the roadways with them. It is confirmed by the Los Angeles District Attorney, who admits that an average of eighteen people are killed and over forty are injured each year by other drivers shooting from their cars. He seeks to have a law passed that makes it an offence to shoot a weapon from a car, but is opposed by his fellow Republicans.
The Dow Jones Industrial Average breaks the 2600 mark, having risen over one hundred points in just two weeks and closing at 2604.87 points. Analysts point to wholesale inflation rates falling to just 2%. In percentage terms, the size of the rise is the fourth-largest run in history and the largest since the post-war boom of 1949-1961. (The two largest stock market booms were the New Deal boom of 1933-37 and the 1920’s run-up which preceded the Great Depression.)
Texas Governor Bill Clements continues to scandalise the country by today describing the federal regulation of savings and loans industry as “absolute fraud”. Treasury Secretary Nicholas Brady states “emphatically” that depositors are safe and has guaranteed up to $100,000 per customer. Brady claims that Clements deserves a “sharp rebuke”.
It is confirmed that Laurence Silberman will appear before the US Senate Judiciary Committee on 15 September, but its chairman, Senator Joseph Biden, has already indicated he will vote against confirmation. Biden tells a fundraising dinner that Silberman will try to revoke many milestone Supreme Court decisions. President George Bush states that the Democrats are upset that Silberman will put “law ahead of opinion” and that opposition to his nomination is a “deliberate campaign of political misinformation”.
US President George Bush signs amendments to the Electoral Act into law. The changes, which provide public funding for campaign elections, will “ensure freedom of speech in the democratic process”. While Democrats support the changes, they charge that the Republican support is based upon the need for “media money” to boost the party’s support in 1988.
Dealing with a declining economy, Dallas authorities finally agree to long demands to re-open the Texas School Book Depository, with plans to turn its sixth floor into a historical exhibit. The project is expected to be completed by the 25th anniversary of the assassination attempt on John F. Kennedy.
Arkansas Governor Bill Clinton calls on conservative Senator Sam Nunn of Georgia to run for the Democratic nomination. Nunn, who is currently touring Europe with his family, declines to comment on the call.
US new housing starts are reported to have risen in July, the first monthly increase since February, an indication of increased security about the stability of interest rates. Figures released the same day show that inflation continues to fall, indicating downward pressure on interest rates.
Former Senator Gary Hart states that he will not re-enter the presidential race, hosing down recent allegations made by his former political director. He points out that he has nearly one million dollars in debt relating to his previous effort and that most of his organisation has moved on to other teams. It is “nutty”, he claims, and “a terrible, terrible idea”.
The US Supreme Court rules that public schools may not ban “books promoting secular and godless humanism”, such as the Wizard of Oz and The Diary of Anne Frank. The case has been brought by a group of fundamentalist Christians in Tennessee and Alabama, who state that discussing and reading about beliefs other than their own is a violation of their freedom of religion.
A family home in Florida is burned to the ground after the family wins a court battle against the local school district to admit their children to the public school. The three brothers, all haemophiliacs, had been denied entry due to their HIV-positive status. Their plight paralleled that of Ryan White, who had fought through 1985 and 1986 for similar rights. (One of the brothers, Ricky, will later die from AIDS.)
US Transport Secretary Elizabeth Dole announces a new piece of legislation to fine airlines for their chronically late flights (only 30% of flights depart within an hour of their scheduled time). Within sixty days, airlines will need to raise that total to 50%, and reach 75% within six months.
US President George Bush agrees to attend a debate among the Republican candidates, scheduling the event for mid-October. While the Democrats have already had three televised debates, the Republicans have not. The primary reason has been the President’s general unwillingness. His campaign manager, Lee Atwater, has seen little point in debate when Bush has such an advantage, but eventually agrees due to public pressure.
Former Senator Paul Laxalt announces that he is withdrawing from the race for the US Presidency, citing a lack of “fire in the belly”. He calls for Republicans to throw their votes to Representative Jack Kemp, arguing that President Bush is too moderate. It reduces the race on the Republican side to just four candidates: President Bush, Senator Robert Dole, Kemp and Rev. Pat Robertson.
Arizona Governor Evan Mecham, who is under increasing pressure from those attempting to secure his recall, states that his attackers are “dissident Democrat homosexuals” who have “crossed the point of decency”. He charges that he will pursue a libel suit against some of his critics.
US real estate developer Donald Trump takes out full-page ads in New York, stating that Saudi Arabia should be forced to pay for the US troops and ships being stationed in the Persian Gulf. He also confirms that he will be attending and speaking at a New Hampshire Republican Party fundraiser, opening speculation that Trump is organising a political campaign.
Former aide to US Senator John Kerry and member of Veterans For Peace, S. Brian Wilson, is run over by a train leaving Concord Naval Weapons Station in California. The pacifist loses both legs below the knees and incurs loss of his right frontal lobe. It will emerge that the train had been ordered not to stop due to the FBI’s identification of Wilson as a domestic terrorist due to his peace activism.
US President George Bush walks out on a meeting with members of various conservative groups. The latter have been attacking him as too moderate over rumours of a national health insurance scheme, failure to act in Central America, being “too soft” with the Soviets, and the emasculation of Ronald Reagan when President. The groups, such as the Heritage Foundation, indicate they will throw their support to Representative Jack Kemp.
Republican pollsters release their figures showing that 45% of Republican and Republican-leaning voters support President George Bush for the nomination. He performs better in being seen as decisive, strong and trustworthy. It indicates that the other Republican candidates are steadily falling behind and are losing momentum, showing that the Presidential profile ahs been a strong advantage to Bush.
In response to the Republican release, some Democrat-leaning papers have commissioned their own polls. It notes that Jesse Jackson is the strongest candidate, but only has 29% of support among Democrats and Democratic-leaning voters. His nearest competitors are Massachusetts Governor Michael Dukakis, who is distantly behind at 11%, and Senator Joseph Biden, on 9%. Jackson has 62% among black voters, but only 20% among white voters. In rating favourable and subtracting unfavourable impressions, Jackson scores 49%, higher than Biden (28%) but lower than Dukakis (60%).
The world’s largest selling music artist, Michael Jackson, releases his first album since the landmark Thriller. The new release, called Bad, wins acclaim for its massive hits, “The Way You Make Me Feel”, “Man in the Mirror”, “I Just Can’t Stop Loving You” and “Smooth Criminal”.
Laurence Silberman gives a press conference on the second day of his appearances at the US Senate Judiciary Committee. He denies he will be an ideological activist, claims he has no opinions on school prayer, supports civil rights when “they create more good than harm”. He also states that his politics should have no impact on his confirmation as a Supreme Court Justice and defends his record during the Nixon Administration.
US Transportation Secretary Elizabeth Dole announces her intention to resign in order to support her husband’s presidential campaign. She becomes the fifth member of the former Reagan Cabinet to resign since former Vice President Bush assumed the Oval Office. Her position will be filled by her current deputy, James Burnley.
During an interview with Associate Justice Thurgood Marshall, he is asked by the television host to assess the record of former President Ronald Reagan. Marshall replies that, “Reagan is at the bottom. I think he’s down with Herbert Hoover and that group.” The former President finally breaks his silence with a brief written statement, claiming the Justice has not given a “fair representation of my record”.
Following a campaign discussion on education, US President George Bush states it is “one of my most fundamental concerns”. He suggests that “more money does not mean a better education” and suggests that the Democrats are held hostage by special interests. He suggests greater independence for school, with greater flexibility in staff selection and educational approaches, and a lessening of reliance upon traditional education to allow greater choice.
The First City Bank of Texas receives word that the FDIC will intervene with $970 million in assistance, the second largest bank rescue in the country’s history. The bank has admitted to $1.8 billion in bad debts and annual losses of $702 million.
Despite a report that the US trade deficit has once again begun to expand, reaching a new record for the fourth month in a row at $16.2 billion for July, the Dow Jones Average remains high due to confidence of low inflation. Today, it closes at 2530.48 points, up over 44 points for the week and having broken a two-week bearish streak.
Reverend Pat Robertson confirms that he has the money and support to be considered as “more than a fringe factor” with perceived victory in a debate in Iowa. Bush campaign officials express concern that the Republican Party is being taken over by enthusiastic and vocal religious partisans, connected to the emerging Pentecostal movement. Other party officials point to Robertson’s claim that he receives frequent and direct instructions from heaven and his suggestion that atheists would be denied any positions in any Administration he led.
It becomes clear that Supreme Court nominee Laurence Silberman has insufficient support in the Senate to be approved, with at least four Republican senators siding with the Democrats. Silberman advises the White House that he wishes to withdraw from the process.
During celebrations in Philadelphia to commemorate the 200th anniversary of the Constitution, US President George Bush expresses “significant disappointment” over the denial of his preferred nominee for the Supreme Court vacancy. Later in the day, he announces the nomination of New Hampshire Superior Court Justice David Souter to fill the vacancy on the advice of that state’s governor and chairman of the National Governors Association, John Sununu. There will be none of the controversy that surrounded Silberman, and Souter will ultimately be appointment to the Supreme Court bench just before the Senate goes into winter recess.
Beryl Sprinkle announces his intention to resign as the chairman of the Council of Economic Advisors in November. He will be replaced by Professor Michael Boskin of the University of Stanford.
US Democratic presidential candidate Senator Joseph Biden stops in the middle of a speech in New Hampshire, suffering from a severe migraine. He returns and finishes the speech fifteen minutes later. Speculations regarding the health of the candidate are quickly dismissed as “media exaggeration”, but serve to give him the strong name recognition that he has been seeking.
Southern California cleans up in the aftermath of a 5.9 magnitude quake three days ago on a previously unknown fault structure, centred on the township of Rosemead. It leaves one hundred people injured, six dead and will later be estimated to have caused $360 million in damage.
It becomes clear that Arizona Governor Evan Mecham may face recall as Arizonans signing petitions to that effect exceed the numbers required to put the issue to a ballot. Mecham continues to insist that he is being attacked by a “well-funded minority of militant homosexual liberals” and asks donors for more money to fight the attempt to remove him from office.
It is revealed that the US unemployment rate has hit a new low of 5.5%, reflecting a growth in export. Some economists predict that the 58th consecutive month of growth will push up wages, but the Labor Department suggests that the falling number may actually hide discouraged job seekers and that the real rate is actually above 6.2%.
During a public campaign speech in New York, Reverend Pat Robertson’s supporter turnout fails to achieve sixty, let alone the five hundred expected. Instead, the positions are taken by activists comparing Robertson to Hitler, jeering with placards, and a generally unwelcome response. He is forced to jettison his speech and is seen by the press as having been shaken by his reception.
Legislation is introduced to the US Congress to ban smoking on airlines where the flight is less than two hours. It will pass without controversy.
The book on late CIA Director William Casey admits that he worked together with the KGB to eliminate members of Hezbollah in Lebanon, monitored the communications of Egyptian President Hosni Mubarak and had leaked Argentine intelligence to Britain during the Falklands War. Author Bob Woodward is criticised by Casey’s widow and by President George Bush, who insists that it is a fabrication.
Republican Party nominee Howard Baker becomes a “study in discomfort” when asked what he would do as President to find common ground between the White House and the Congress on cutting expenditure. It leads to strong suggestions that he is prepared to raise taxes in order to reduce the deficit.
US Federal Reserve Chairman Walter Wriston gives in to pressure to reduce interest rates, cutting the base rate by 25 basis points in order to increase market liquidity. He cites the stagnant stock market, which has not moved significantly in eight weeks. The discount rate falls to 5.75%. Wriston argues that recent minimum wage rises will balance out the falling unemployment rate and that there are signs of low liquidity in the market.
Support for Republican candidate Howard Baker is seen to falter as he attempts to occupy the same ground as President George Bush. Baker claims, despite visible tiredness, that he loves campaigning and is establishing a niche as a coalition builder who will end the polarising debates of US politics.
The US is enthralled by the story of “Baby Jessica”, an eighteen-month-old baby who falls down a well in Midland, Texas. Jessica McClure spends fifty-eight hours trapped, during which time the impact of live video news begins to truly show its national, if not global effect as the little girl taps emotions with her brave humming of a Winnie-the-Pooh song.
The Dow Jones Industrial Average falls by 78.88 points, down 3.3% on the day and ending the day at 2340.32 points. The market is now down 11% on its August peak, but traders insist that this is not yet a “bear market”, that prices are generally stable and that today’s result may be an aberration, based on concern about insurance derivatives. Others point to the announcement of August’s trade figures; while the trade deficit has fallen from July’s record level of $13.55 billion to a figure of $12.89 billion, investors are concluding that the dollar may need to fall further.
The Dow Jones falls further, down 46.44 points to end the day at 2295.88 points. A number of banking institutions raise their prime lending rates to defend against the loss of revenue, threatening to exacerbate the market rate.
US Treasury Secretary Nicholas Brady expresses concern over the downward trend in the market when the market falls a further 85.93 points, ending the day at 2209.95 points. He explicitly suggests that the Federal Reserve will cut interest rates by a further 25 basis points at its next meeting, reducing the discount rate to an extremely low 5.5%, in order to increase market liquidity. Baker points out that inflation has risen by less than 0.3% in the September quarter and there is no need for concern. Many see hope when the market stages a rally in the final hour of trading, turning back what looked like a possible 140 point loss.
Former Arizona Governor Bruce Babbitt announces his withdrawal from the US presidential race, admitting that being at the bottom of the polls and running out of campaign funds have marked the end of his efforts.
The Dow Jones plunges again, falling 60.22 points to 2119.93 points, but the roller coaster ride is over. Friday’s trading will be flat as the world stands back to observe the wreckage, fortunes made and lost and to wonder at the future of the Reagan economic miracle.
The husband of former Vice Presidential candidate, Geraldine Ferraro, is cleared of wrongdoing. She insists that she has been the victim of an “empty political indictment” designed to prevent her from making a run for the Senate and, ultimately, the presidency.
New polling on the US presidential election shows that Jesse Jackson remains the preferred Democratic candidate with 26% (a fall of 3% since last month), followed by Senator Joseph Biden on 13% (up 4%) and Governor Michael Dukakis on 12% (up 1%). However, nearly half of Democrats stated they were dissatisfied with the field of candidates. On the Republican side, the wide lead of President George Bush in August polls has narrowed substantially. His margin over Senator Bob Dole has narrowed from 24% to just 10%.
After a series of accidents and failures, US Defense Secretary Richard Cheney orders that the US Air Force should retire the A-7 Corsair II. Production had already been shut down in 1984. Cheney states that production of the F/A-18 Hornet will be stepped up to compensate to allow for a more speedy replacement of the old air fleet. He also admits that the Strategic Defense Initiative is likely to be mothballed in the upcoming Budget.
The longest jury trial in US history comes to an end with Monsanto Company for failing to warn a Missouri town of the risks arising from spill of a chemical, dioxin, in 1979. The court finds in favour of the plaintiffs, fining Monsanto $51.4 million, after it is proven that Monsanto has deliberately falsified scientific information it provided to the Court.
US Treasury Secretary Nicholas Brady admits that credit problems may emerge from the market hiccups. He states that growth in the United States remains stronger than anticipated without any inflationary breakout and that this, along with cuts in interest rates, should provide a strong buffer for any problems resulting from the crash.
New US polling finds that the population generally believe they will be unaffected by the recent stock market crash, but, at the same time, one in four will cut their expenditure. A clear majority of the population believe in reductions in military expenditure and increased protectionism to address the budget and trade deficits. Most believe that taxes will need to increase under the next President. 64% believe the stock market crash is the result of “greed by Wall Street speculators” and 57% believe the Congress should bear “primary responsibility” for the budget deficit.
In a public debate by presidential candidates over the economy, President George Bush expresses support for increased education funding and a balanced budget. He attacks Senator Bob Dole for his support of the $29 billion farm bill in 1985 and Representative Jack Kemp for his categorical refusal to deal with Democrats as ways to ensure a continued deficit. He also states that the only Democrat with an economic plan is Jesse Jackson, who wants to “gut the defences of the nation to pay for ambitious socialist programs”. He expresses disappointment over Democrat wins in all three gubernatorial elections held today. 4 November
Chrysler announces plans to trim ten percent of the company’s employees in response to a projected fall of 15% in the sale of new cars and trucks in 1988. Chairman Lee Iacocca states that the recent stock market fall will have a “significant effect on consumer confidence and ability to spend”.
US Treasury Secretary Nicholas Brady announces his intention to establish a taskforce to investigate the recent stock market crash, in conjunction with the Securities and Exchange Commission. He suggests that the taskforce will look into program trading, the nature of speculative insurance derivative, the capital requirements of traders and the establishment of global regulations governing trade, particularly in commodities.
Long-serving Louisiana Governor Edwin Edwards announces that he will not seek a fourth term. It is widely expected that he will be replaced by another conservative Democrat, four-term Congressman Buddy Roemer, the son of the Governor’s former campaign manager.
Jessica McClure, the baby at the centre of last month’s drama in a Texas well, is finally released from hospital, having undergone skin grafts to heal the injuries to her head and right foot. Her first public appearance scores a high press attendance and results in a spontaneous public celebration involving hundreds.
The Dow Jones is showing clear signs of recovery from recent falls, climbing 5.3% over the course of this week. The dollar, however, has reached 40-year lows against the yen and seven-year lows against the deutschemark. According to Merrill Lynch, it signifies a “major weakening of inflationary pressures”. Not so happy is Continental Illinois Bank, which, having been bailed out only three years ago, admits today that it has lost over $100 million in the stock market jitters. There is a lot of happiness, however, in London, where Union Bank International admits that it has re-established its previous market position, paying $1.67 billion less for assets it recently sold.
Former Arizona Senator, Barry Goldwater, calls for the resignation of Governor Evan Mecham, calling him a “veritable factory of faux pas who has neglected the day-to-day administration of government and raised questions about improper, and perhaps illegal, conflicts of interest”. The statement follows a subpoena by a grand jury over a loan by a property developer to the Governor.
David Souter is confirmed as the newest member of the US Supreme Court bench, despite complaints by Senate right-wingers such as Jesse Helms that he is a “vanilla Republican”. Senate Judiciary Chairman Joseph Biden states that he had a “full and fair hearing in the assessment of his nomination” and raised no objections from either side.
It is revealed that the US budget deficit for the coming year will be at least $23 billion lower than previously projected, and it is believed the figure will come in at about $171 billion. The arrangement has come about as the result of a negotiation between the White House and Speaker Tom Foley. Foley states that the Federal Reserve has also been convinced of the need to stop supporting the dollar, a process which has cost $90 billion this year alone.
Tipper Gore, wife of US presidential candidate Senator Albert Gore, travels to California to reconcile with entertainment figures that are a rich fund of endorsements and cash for the Democratic Party. Tipper Gore spearheaded a campaign against “offensive” rock lyrics two years ago and is trying to clear the air with music industry executives and performers who might be needed for her husband’s campaign.
A new poll shows that the Rev Jesse Jackson has jumped into first place among Democrats in Iowa with 14% support. However, many commentators are arguing that there is a distinct limit on Jackson’s ability to carry an election and that the Democrats are merely “flirting” with his candidacy before moving on to a more conventional candidate in three months’ time.
Rumours circulate the Pentagon that, due to his lack of support for planned defence cuts by President George Bush, US Defense Secretary Richard Cheney is considering resignation. Cheney publicly denies the rumour, condemning elements of the Pentagon hierarchy which are “anti-reform” for attempting to undermine “vital changes”.
Senator Bob Dole travels through New Hampshire, urging voters to forget his role as Vice Presidential candidate to Gerald Ford in 1976 and to buy his new image of a wounded war hero, calling for “competent and compassionate management”. He has been on national news programs every night for the past week and is now being considered as a serious threat to President George Bush.
Tania Aebi, a 20-year old New York bicycle messenger, becomes the youngest person ever to complete a solo circumnavigation of the world. She defies local law by taking her first sip of champagne as she triumphantly disembarks in New York harbour.
The US dollar, responding to potential for lower US interest rates, goes into freefall. Today, it reaches 175.1 yen and 2.16 deutschemarks, its lowest rate in the post-war period. The fundamental dive in the dollar’s value is, in turn, driving up US competitiveness and opening the way for a substantial fall in the trade deficit, predicting that the end of year figure for 1987 may be below $100 billion. Treasury Secretary Nicholas Brady expresses concern that the inflation genie may once again escape from the bottle.
Senator Paul Simon of Illinois, the would-be candidate who withheld the presidential race, states that the Democratic Party must have a leader who has “authenticity in an age of image, a commitment to global peace, an end to backsliding on civil rights and a return to pro-labour sentiments”. Accordingly, he calls for his supporters to back either Senator Joe Biden or Reverend Jesse Jackson, rejecting Governor Michael Dukakis as “more spin than substance”.
US House Speaker Tom Foley arrives in Managua, Nicaragua, for talks with President Daniel Ortega and Miguel Cardinal Obando y Bravo. His “good faith” mission opens up the potential for new relations between Nicaragua and the United States. He brings a message that Congress will not fund any further aid to resistance forces in Nicaragua, on the proviso that Nicaragua continues to take steps towards reconciliation. The trip is condemned by Arizona Republican Senator John McCain as usurping the President’s foreign policy authority.
Richard Gephardt takes to the stump in Des Moines, where he attacks the economic record of Governor Michael Dukakis as “unsustainable” and gives a stirring defence of tough trade policies. His investment in Iowa has been heavy and Gephardt states that he is confident that the February caucus will “catapult me ahead of the pack”.
The American Civil Liberties Union (ACLU) announces that it will take New York City to court over its decision to force the mentally ill homeless into hospitalisation. It argues that the action is “wrongful imprisonment” and focuses on Joyce Brown (better known as Billie Boggs), who will be released despite her mental illness because her behaviour is “of no obvious danger”.
There are gasps and applause at Sotheby’s New York office when the 1889 masterpiece, Irises by Vincent Van Gogh, sells for $53.9 million, breaking the record set for Sunflowers just eight months ago for the highest price paid for a piece of art at auction. Some view only the irony that Van Gogh died a pauper, the highest price ever paid to him directly for a piece being $80.
US President George Bush gives an address on the status of the “War on Drugs”. He states that cocaine supply has fallen by 40% over the last two years and that “street purity” has fallen from a peak of 65% to “slightly above” the 1983 level of 35%. He also points to demand reduction due to an increase in treatment programs and pleads with the Congress not to cut the anti-drugs budget.
The Joint Congressional Committee on Iran and Nicaragua finally reports, with a number of Republicans joining the majority in laying blame squarely at the feet of former President Ronald Reagan. It criticises him as “lax in management” and “far more knowledgeable on issues than he admitted”. It states the former President’s statements were “not credible”, that the National Security Council has been “out of control” and that the Oval Office had attempted to “privatize foreign policy”. It also concludes that former Attorney General Edwin Meese had “deliberately falsified evidence” to the Committee.
It is confirmed that the 1987 US trade deficit will be considerably lower than last year’s, with figures ranging from $99 billion to $128 billion (September’s figures are still not yet processed). Either way, it is still at least $35 billion below 1986 figures and helps to boost the Dow Jones once again. There is also reports that Congress and President George Bush may be about to reach agreement on a budget, only $5.4 billion apart, and the President has reluctantly agreed to tax increases.
Withdrawn Democratic Party candidate Bruce Babbitt throws his support behind Missouri Representative Dick Gephardt, his fellow member of the Democratic Leadership Council. He calls on the Democratic Party to face the need to raise taxes and slash “middle class welfare”. He states that his fundamental reason for withdrawal was his inability to “stand it another day”.
Senator Paul Simon publicly speculates that New York Governor Mario Cuomo is about to announce that he would accept a draft by the Democratic Party for the presidential nomination. The speculation follows a meeting between Cuomo and Democratic Party chairman Paul Kirk in which Cuomo allegedly states his “cool feelings” for the current candidates. Tackled by Tom Brokaw on NBC, Cuomo refused to comment on the matter.
The US Budget deficit is finalised at $170.9 billion, signalling tax increases and spending cuts amounting to over $23 billion. President George Bush states that the plan is “the right message at this right time”. It includes $5.3 billion in defence cuts and a 2% cap on cost of living adjustments for social security over the next year.
The FBI convicts five African Americans with plotting to commit terrorist acts against the United States in Chicago. The individuals, in a group called El Rukns, boast about their connections to Ayatollah Montazeri of Iran and President Gaddafi of Libya. It is proven that they made contact with Tripoli, but there is no evidence that Gaddafi made any promises to support their actions.
Australian raider Robert Holmes a Court announces he is reducing his stake in Texaco by half, selling his shares at a loss of $8 each and losing about $450 million on the deal. Like other raiders globally, Holmes a Court is suffering in the credit squeeze prompted by the stock market crash.
US President George Bush does a series of appearances across the country, promoting funding for “economically distressed” communities affected by threat of economic downturn. The communities qualify by showing less than 0.3% population growth and 0.5% employment growth in the last year. He is questioned about cuts to agriculture, which he states has been “too reliant for too long on federal handouts”, including over $23 billion last year. He argues that the cost of farms inputs have fallen by 3% and that crop incomes are up by 12%.
A US poll finds that 54% of Americans “strongly support” the upcoming peace deal with the Soviets and note a building base of support for US President George Bush within the electorate. There is also strong support for his actions on the budget, with the President gaining the credit for the achievements over the Congress. There is also a feeling that Americans will make welcome Soviet inspectors rumoured to be required under the new peace deal. According to one quote from a Utah respondent, “It doesn’t really faze me. Surely we can all learn to cooperate for a change.”
US President George Bush expresses confidence that the country’s economy will retain economic momentum and avoid recession, despite the stock market fall. Arguing “the fundamentals are sound”, he points that interest rates are being adjusted in West Germany, France and the Netherlands, which will boost demand for US products and level out the fall in the dollar.
Brokerage house E. F. Hutton is downgraded by credit organisations, prompting chairman Robert Rittereiser, brought in to reconstruct the company after the 1985 scandal, to announce the company will be broken up. It will eventually be sold to Shearson Lehman Brothers, Dean Witter and Merrill Lynch.
Lawyers representing publisher Larry Flynt and his magazine, Hustler, argue before the US Supreme Court that the award of “emotional damages” to Rev Gerry Falwell violates the First Amendment of the Constitution. Hustler had published during 1983 an advertisement during which Falwell was portrayed as being involved in a drunken sexual rendezvous with his own mother.
Another poll released on the recent US/Soviet deal shows that 60% of Republicans support the President’s actions. Talking to “probable voters” among Republicans in Iowa and New Hampshire, the result is even higher at 74% and 71% respectively. It shocks many Republican candidates, who, excepting Howard Baker, have attacked the President for being soft on Communism and opposed the deal. Senator Al Gore (D) uses the opportunity to also attack the Republican Party, portraying them as “captives of ideology” and “divided over the basic issues”.
Despite an ongoing low value for the dollar and unrest on the markets, Federal Reserve Chairman Walter Wriston states that rumours about a recession are “radical speculation which threatens consumer confidence”. He says that, after inflation, the Federal Reserve projects that there will be 2.4% growth in GDP during 1988. He also states that the low dollar means that there will continue to be falls in imports, with Americans increasingly turning to domestic goods. The Dow Jones seems to indicate that the country is unconvinced, closing today at 1811.03 points, still 30% below the all-time high and about 300 points down on the year.
New York Governor Mario Cuomo, attending a pre-Christmas celebration, announces that he has decided to run for the presidency of the United States of America. The shock waves rock through the Democratic establishment. There are only seven weeks remaining before the first Democratic primary in Hawaii, and just over a month before the first Republican primary result in declared in Michigan.
The Federal Deposit Insurance Corporation chairman, William Seidman, advises that the year has been the worst in fifty years for the banking industry. With losses by most of the large banking institutions, he states that the banks are being forced to become leaner and more competitive in order to deal with nearly $60 billion in bad debts. He also states that the federal government should consider some level of intervention if the economy slows further, in order to prevent a recession, and focus on maintaining growth over controlling the deficit.
It is admitted by a San Francisco businessman that he has sold over thirty thousand “Gorbachev dolls” in the Christmas season, with padded clothes to make up for the fact that, from the neck down, the plastic Gorbachev is actually Barbie’s boyfriend, Ken. The foot-tall dolls retail for $19.95.
Escaped convict and member of the Manson family, Lynette Fromme, is recaptured after a forty-hour manhunt in West Virginia. Fromme is serving a life sentence for an attempt to assassinate former US President Gerald Ford.
A poll taken over the last fortnight in Michigan shows President George Bush is well ahead of his nearest competitor for the Republican candidacy by a margin of nearly two to one. The numbers for the polls show Bush at 38%, Senator Bob Dole on 22%, former Senator Howard Baker at 19%, Rev Pat Robertson on 17% and Congressman Jack Kemp on a mere 4%.
New York Governor Mario Cuomo declares that he has an “independent brand of leadership, a sense of direction and a new set of national ideas” to bring to the Democratic debate. Governor Michael Dukakis of Massachusetts suggests that a Cuomo candidacy “will be as disastrous for the Democrats as Jesse Jackson”.
Arizona Governor Bruce Babbitt meets with Massachusetts Governor Michael Dukakis. His previous endorsement of Representative Richard Gephardt is not withdrawn, but it is suggested that he may be attempting to line up a job in any potential Democratic administration.
Retired US Air Force master sergeant, Ronald Gene Simmons, is charged with the murder of sixteen people, all but two of them family members. He had previously been indicted in 1981 for incest. The rampage, which lasted for six days, was the worst family slaughter in history.
There is an outcry as a 1985 video tape circulates of Republican presidential nominee, Rev. Pat Robertson. In the tape, Robertson states that any person who is not a devout Christian or Jew should not be entitled to serve in government. Compounding the offence, questioned by knowing media before the tape becomes public, Robertson denies having made any such comment.
A US auction house sells a 1908 watercolour by Adolf Hitler, at the time a street painter in Vienna, for $36,000. Protestors at the auction state that the promotion of Hitler’s name to sell the show is an insult to the wider community, and Jews in particular.
New polling shows that the candidacy of Mario Cuomo is highly popular, but concern is expressed by Democratic Party officials that it is insufficiently concentrated for him to “win” any state outside New York. They are also concerned that the presence of Cuomo in the race will sufficiently split the delegate count to prevent the Democrats from going into the convention with a clear candidate.
The US dollar is continuing to fall, dropping to ¥118 and continuing to fall to new post-war levels. Treasury Secretary Nicholas Brady states that the US trade deficit is continuing to restrict as a result of the fall, but he also warns that consumer spending is flat and that, if it falters further, the United States could face a recession. “Flat domestic spending is OK if the dollar leads to a surge in exports,” he states. When asked about the chance of recession, he comments that “there are risks in the system, but I would be prepared to bet my money that we’ll get through it.”
Polls show that Senator Al Gore has built a strong base around the South, likely to win Arkansas, North Carolina and Tennessee. Polls from other states have recently showed him ahead in Nevada and a close contestant for Jackson in the rest of the South.
Australian media owner, Kerry Packer, adds the New York Post and Boston Herald to his television and publishing empire, for $39 million after former owner Rupert Murdoch is forced to release the paper under new media ownership regulations, with the price apparently decided by the flip of a coin. The latter paper continues its battle with Massachusetts Senator, Ted Kennedy, who had been attacking New York Mayor, Ed Koch, for being a “media magnate mouthpiece” over his criticism of the regulations.
Polls show that, in Iowa, Republicans are twice as likely to vote for Senator Bob Dole as they are for President George Bush. Even more concerning is that President Bush has only just made second place, with former Senator Howard Baker within the margin of error.
Arizona Governor Evan Mecham is indicted by a grand jury on charges of fraud, filing a false report and perjury over an undisclosed loan. Mecham is reportedly about to be dumped from Republican Party membership, with former House of Representatives Minority Leader, John Jacob Rhodes, expected to be his replacement on the Republican ticket at a recall election. Impeachment proceedings are begun the following day.
Arizona Governor Evan Mecham is indicted by a grand jury on charges of fraud, filing a false report and perjury over an undisclosed loan. Mecham is reportedly about to be dumped from Republican Party membership, with former House of Representatives Minority Leader, John Jacob Rhodes, expected to be his replacement on the Republican ticket at a recall election. Impeachment proceedings are begun the following day.
The US National Coalition for the Homeless warns that this winter has been particularly bad, with the nation’s homeless population rising by 32% in the last year. The amount of crime has also risen dramatically, with homeless people committing break and enter and squatting. They call on five cities, Washington, New York, Los Angeles, Philadelphia and Chicago, to open all municipal buildings as shelters.
Entering circulation today is a gold-coloured coin. As part of the US Budget cuts, the US dollar bill is replaced by the coin, bearing the Great Seal of the USA on each side of the coin. The picture of George Washington has been transferred to the new $500 note, the first new note since 1969.
Former Senator Howard Baker appears in a nationwide poll. While other candidates are stronger or weaker in particular states, Baker records a solid rump in every state, controlling between 17 and 22 percent of the likely Republican primary vote.
A rescue of the dollar is made by the central banks of the world’s major industrial economies. The dollar soars to ¥124.3 and 1.62 deutschemarks, but there is not great confidence, with analysts predicting that the US budget deficit will begin to climb again this year. It is expected whoever takes power in November will need to increase government spending, not cut it, in order to counter the instability in the economy. Every market analyst is still waiting for the November figures to confirm which way the currency will head next.
The Pentagon confirms, after much wrangling, that it will proceed with its Seawolf submarine project, hoping to get the SSN-21 keel laid before the end of the year. US Defense Secretary Dick Cheney is using SDI cuts to spend up in other fields, while still reducing the overall budget number as President Bush has insisted.
The US Internal Revenue Service contributes to Texaco’s problems, announcing that, from details emerging in its court ordeal, they have been able to reassess Texaco’s tax burden for 1979-81. The outstanding tax bill is $6.5 billion plus interest. The company will be forced to sell its entire Canadian network to Exxon Corporation.
On the anniversary of his assumption of the Presidency, George Bush expresses strong confidence that he will win the Republican Party nomination to commence his second term in November, but that “in the confusion in the processes of the other side, I can’t predict who I’ll be beating”. With two peace deals (Middle East and Soviet) under his belt, a growing economy, low inflation and a significant fall in the budget deficit, not to mention the power of incumbency, questions over the re-election of George Bush are beginning to dissipate.
US Treasury Secretary Nicholas Brady concludes his investigation into the fall on the Dow Jones late last year. He points to bad investment decisions by Wells Fargo, Aetna and six others through the involvement in a portfolio insurance scheme, which was responsible for twenty percent of the fall.
CBS news anchor Dan Rather vehemently attacks US President George Bush in an editorial on the role of Bush in the Iranian and Nicaraguan scandals. He suggests that there is considerable evidence that Bush actively sought to not know what was going on in the National Security Agency, but admits that there is no “concrete evidence”. He links his outburst to Bush’s former position as CIA Director. It is condemned by White House Chief of Staff Kenneth Duberstein as a piece of “amateur and partisan muckracking”.
Florida’s Governor Bob Martinez (R) begins to receive serious flak as the two percent increase in sales tax introduced to cover the cost of abolishing the services tax. Martinez argues, however, that it will maintain fiscal prudence at a time of financial uncertainty and again offers to install a 5% tax on services instead to cover vital growing costs.
The Washington D.C. Court of Appeals finds that the method used to appoint an independent counsel was unconstitutional, as were the limitations placed on the President to remove them. President George Bush claims justification for his decision to pardon all those who were targets of investigation, saying it put to rest an “unconstitutional witchhunt”.
Joining every President since Ulysses Grant, George Bush delivers his first State of the Union and uses the opportunity to ask for a line-item veto to force Congress to cull a list of excesses. In a “Democrats waste list” put together by the White House, Bush demonstrates nearly $5 billion of poor spending slipped into last year’s Budget papers. He also raises the idea of a fee on oil imports, which he states would boost the economy of Texas and Louisiana and spur energy conservation. He also states that it is time for the nation to tackle health reform if it wishes to handle the budget deficit problem over the long-term, stating that “it is the uninsured and underinsured who add the most costs to the system”.
US President George Bush wins the Michigan primary for the Republican nomination, taking 38.1% of the vote. Both Senator Bob Dole and former Senator Howard Baker come in approximately at half Bush’s figures. Dole states that the results are within his expectations. Congressman Jack Kemp is beaten into fifth place by Reverend Pat Robertson. Kemp’s anti-tax message is not resonating with the electorate.
In light of the President’s comments on health reform, General Motors expresses concern over the rising cost of doing business, pointing in particular at their health insurance plan. It states that costs for business have risen thirty percent in the past year and Medicare premiums have risen by a similar margin.
US Defense Secretary Dick Cheney warns that there will be close to $27 billion in cuts from the defence portion of the 1989 budget, citing serious concerns about the federal deficit and severe budgetary constraints.
At the Kansas primary for the Republican Party, Senator Bob Dole starts his delegate count, winning 42.3% of the primary and establishing a lead of 18% over his nearest rival, President George Bush. However, as Kansas is smaller than Michigan, Bush still leads the delegate tally and claims that, within the next six weeks, he will establish an unassailable position.
CSB news anchor Dan Rather states that he regrets the recent on-air argument with President George Bush. Many suggest that the back-down by Rather has been inspired by the threat that he may find himself with Diane Sawyer as a co-anchor
Powerful Georgian Senator Sam Nunn (D) endorses Senator Al Gore as the Democratic presidential candidate. Many had suspected that the senator may swing behind Rep. Richard Gephardt, but his support of Gore now gives the senator from Tennessee the best chance of a substantial vote on Super Tuesday.
The US Republican Party and Democratic Party hold their primaries in Hawaii. In the latter, Governor Michael Dukakis just beats Governor Mario Cuomo (26.5% to 25.6%). Jesse Jackson picks up 19.9%, while the other three candidates, Joseph Biden, Al Gore and Richard Gephardt, achieve 12.8%, 9% and 6.2% respectively. In the former, Rev Pat Robertson marches is with 38.8%, with the other candidates splitting the result almost three ways (all within two percent of each other).
FBI Director William Sessions admits that, during the Reagan Administration, his agency had infiltrated legal civilian groups and conducted surveillance on citizens for the purposes of “counter-terrorism”. He states that the violations related to a particular probe and will not be repeated.
US financial figures for December are released. They show a 1.1% growth rate in the quarter, pushing the annual growth rate to 4.0%. It also establishes that over the last two years, while the dollar has been low, imports have only grown by 5.8%, while exports have boomed by 21%. US Treasury Secretary Nicholas Brady announces he believes that, as this is non-inflationary growth, the Federal Reserve could afford to lower interest rates and push growth even further “without awakening the ghosts of inflation past or increasing undue stresses on the dollar”. He states that there are “hints” of developing stockpiles due to lower consumer spending in the New Year.
US President George Bush states that he will not veto a bill recently passed from the House to the Senate, the Civil Rights Restoration Act. The legislation overturns a Supreme Court 1984 ruling on Grove City College, which had been permitted to discover the loophold in legislation mandating anti-discrimination policies in institutions receiving federal funds.
There are media reports that US President George Bush is working with television producer Roger Ailes to frame his image in the election lead-up. Initially a scandal due to erroneous suggestions of government funding for the consultancy, it quickly emerges that Ailes is being paid by the Republican National Committee.
Representative Jack Kemp is criticised for his “back flip” on his proposed spending freeze. He now admits that a small cost-of-living increase for social security payments are necessary, despite having insistently refused to admit this before. After coming last in Michigan, Kansas and Hawaii, Kemp desperately needs to perform well tomorrow in Iowa.
The 1988 US Presidential election season officially commences with the Iowa caucuses. Republican supporters place the death knell on the Kemp campaign, with barely negligible support for the New York congressman. Jack Kemp withdraws from the race immediately. Robert Dole is the preferred candidate by a margin of over 18% and become the immediate media “front-runner”. Representative Dick Gephardt narrowly beats out Governor Mario Cuomo. Jackson and Dukakis both run about ten points behind in the percentage tally.
Governor Mario Cuomo comes under criticism for his free needle-exchange program in New York, with suggestions that it is supporting drug addiction. Cuomo strongly defends the program, pointing to successful programs in Great Britain, the Netherlands and Australia. “For the time being, AIDS is a greater enemy than any drug,” he states.
Senator Al Gore (D-TN) accuses Representative Dick Gephardt of having breached the spending cap in Iowa. Gephardt refuses to confirm or deny and suggests numerous technicalities in Gore’s statement. He also states his opposition to continued spending caps.
In Wyoming, Republicans go to vote in their primary. Senator Bob Dole wins his third state, taking 39.4%, with Bush trailing on 24.9%, Baker on 19.2% and Robertson on 16.5%. Dole moves ahead in the delegate count for the first time.
Democratic presidential candidate and Governor of Massachusetts, Michael Dukakis, declares he believes the creation of new states in Israel’s so-called “occupied territories” should be an internationally-managed process. His position is endorsed by House Majority Whip Tony Coelho, while Coelho’s deputy, David Bonior of Michigan, thinks that Israel needs “a couple of good whacks on the head with a sledgehammer”.
US Treasury Secretary Nicholas Brady confirms findings that stock futures accounted for three-fifths of the downturn on Black Monday. He calls on New York Stock Exchange to place limits on future trading. He also announces legislation that prevents corporate takeovers by raiders, obligating them to hold on to any asset for three years.
US President George Bush is overheard on an open microphone calling Senator Bob Dole “mean-spirited” and saying that his campaign is full of “cronies”. Dole, upon hearing of it, demands a retraction, but there is no response from the White House.
Democratic hopeful Joseph Biden, who has averaging about ten percent in the primaries to date, is rushed to Walter Reed Army Medical Centre with brain aneurysm. He suffers major complications, but survives the surgery. However, he will not be able to return to Senate work for seven months and his campaign for the Presidency ends today.
US Treasury Secretary Nicholas Brady announces a $7 billion rescue package to salvage the remains of the Texas savings and loans industry. He admits that the rationalisation will result in an employment dip, as over one hundred individual institutions will need to be closed.
By an overwhelming margin (49 votes to 11), the Arizona House of Representatives votes to impeach Governor Evan Mecham and the state senate moves to prepare for a trial. Secretary of State Rose Mofford becomes the Acting Governor.
US Defense Secretary Dick Cheney states that he is opening up four thousand military posts previously unavailable to women, arguing that many of the restrictions have no clear and logical rationale.
The New Hampshire primaries are held. Among the Democrats, Jesse Jackson leads the field with over a third of the primary vote (34.8%), while Mario Cuomo comes in a close second. The expected victor, Michael Dukakis, comes in with just 20% of the vote. On the Republican side, President George Bush romps home with a convincing victory over former Senator Howard Baker.
US Treasury Secretary Nicholas Brady calls on the Congress to reschedule the minimum wage increases already planned and instead to expand the popular 401(k) program. Instead of paying for the final wage increases, he proposes, business will deposit 3% of each pay packet into the 401(k)’s of workers. He argues that the United States must increase its savings significantly if it wishes to stay ahead of a major demographic shift.
Rev Pat Robertson wins the Republican primary in Nevada, claiming his second state in seven contests. While Robertson is not as popular in total number of votes as former Senator Howard Baker, his focus on particular states means that he is ahead of Baker in the delegate count. Meanwhile, Mario Cuomo gives an address to the National Press Club in Washington.
With a week before the next Democratic primary, polls are taken to determine who Americans think will eventually be the party candidate. 33% believe it will be New York Governor Mario Cuomo, 28% think Jesse Jackson, 25% say Dick Gephardt and 14% indicate Michael Dukakis. On the other side of the equation, 45% believe that President George Bush will be the Republican candidate, 38% think Senator Bob Dole and 22% for Rev Pat Robertson. Interestingly, few people mention Senator Al Gore, who is holding out for Super Tuesday to create his profile. It is thought that the failure of a clear candidate after Iowa and New Hampshire shows a high degree of fragmentation in the support bases of both parties.
The US trade figures for December come in with a deficit of $11.7 billion, a fall of nearly $1 billion over the previous month. Other positive news out of Japan show that last month’s cut in interest rates, designed to deal with the falling dollar, has encouraged the beginning of consumer spending spree. There has also been a boom in housing construction over the past three months. Analysts point to the recent consumption tax, which has allowed reductions in other taxes, upfront supplements to compensate for the transition and abolishing fees to establish new businesses in Japan.
White House Chief of Staff Kenneth Duberstein confirms that he has chosen not to continue in his current role after the November election. He endorses President George Bush and states that he hopes to continue to act as a source of advice for him “as he carries out his Presidential duties after the election”.
In Republican primaries in Sth Dakota and Minnesota, Senator Bob Dole beats out President George Bush by convincing majority and, for the seond time, Dole moves ahead in the delegate count for the convention. On the other side, Senator Al Gore suggests that he will force Representative Dick Gephardt out of the race on Super Tuesday.
Polling indicates that independents and Democrats would be more likely to vote for Senator Bob Dole, but that 75% of all voters would “never” vote for Rev Pat Robertson. It also shows that, unless Robertson can pick further into Bush’s Southern strength, he is likely to romp ahead on Super Tuesday.
President George Bush wins the Maine primary of the Republican Party, taking his third state in the ten primaries thus far. Analysis of the vote determines that the fervent supply side disciples of the Republican Party have all but disappeared from the process, leaving it to be split between the establishment vote (Bush), the Main Street heartland conservatives (Dole) and the religious right (Robertson).
Reverend Pat Robertson wins the Republican Party primary in Alaska, which is the last primary for the Republicans in this month. At month’s end, the Republican delegate race stands at Dole 133, Bush 122 and Robertson 59. However, with a candidate requiring 1120 delegates to secure the nomination, there are a few weeks to go before a result will become clear.
The Democrats hold their primary in Maine and deliver a narrow win for Governor Michael Dukakis over Governor Mario Cuomo. In the delegate tally of the Democratic Party going into March, Cuomo leads with 43 delegates, Jesse Jackson has 35, Gephardt 25 and Dukakis 24. It begins speculation that nobody will win the delegate chase on the Democrat side and that Jesse Jackson may serve the role of kingmaker. There is also concern that, even though Cuomo leads the delegate count, he has yet to win a state.
The US Department of Commerce reports that the US economy grew by 1.0% in the December quarter, which was just below market expectations. The inflation rate for the whole of 1987 was 4.1%; the annualised rate for January 1988 is 3.8%. Hours later, the Federal Reserve lowered interest rates, with 5% being the new discount rate. The Bush Administration is confidently past the threat of recession created by the Black Monday crash on Wall Street six months ago.
Analysts note that Jesse Jackson has moved beyond his black base and is now building a populist, pro-worker and pro-environmental coalition far to the left of the Democratic base. Current projections have him earning at least seven hundred delegates, or about a fifth of the total, virtually guaranteeing him a place in the bartering in the Democratic Party.
Primaries are held for the Republic Party in the District of Columbia and Ohio. On the Republican side, President George Bush wins both battles, with Senator Bob Dole and Senator Howard Baker coming in second in respective races. With the victories, President Bush moves ahead in the delegate count.
There are allegations of trouble in the Dole camp, with two advisors dismissed during a visit to Florida and some commenting publicly that his wife, Elizabeth, should have run instead. Meanwhile, the scandal surrounding another televangelist, Jimmy Swaggart, is embarrassing Rev Pat Robertson. Some Southerners state that anyone who has met Gore knows he will “look out for our interests”, but complain that “he completely lacks enthusiasm. The inner-city South tends to be swinging toward behind Jesse Jackson.
US President George Bush notes a statistical success by the Drug Enforcement Agency. While crack cocaine has not been eliminated, anecdotal evidence is that the average street price in San Francisco has risen from $100 per gram in 1984 to $150 per gram today. The shortage of crack means that a single hit has now risen from $2.50 to $15, putting it out of the price range of a younger clientele.
In Wyoming, the Democratic Party holds its primary and it is won by Senator Al Gore of Tennessee, beating Governor Mario Cuomo and Rev Jesse Jackson. Meanwhile, in South Carolina, Republicans strongly endorse President George Bush. With Ohio and South Carolina in his column, the President now has double the number of delegates of early front runner Senator Bob Dole.
The US Congress passes legislation agreeing on public funds to be set aside for the upcoming election season. It also places a $100,000 limit on fundraising by House members and a limit up to $825,000 for Senators, depending on state size. Any person who spends outside the guidelines will find their opponent receiving federal money. Senate Majority Leader Robert Byrd states that this has been his crowning achievement prior to his elevation to President pro tempore of the Senate next year.
US President George Bush puts forward his budget proposal for 1989. It has a budget deficit of $95.7 billion, the lowest level of deficit since 1981. He also predicts that the United States will have a balanced budget by 1992, a year behind of Gramm Rudman deadline, and is asking for an amendment to that Act to allow his plan to take effect. The proposal includes income tax increases of $47 billion, corporate tax increases of $6 billion and a rise in the gasoline levy from 9 cents per gallon to 29 cents per gallon. The armed forces will be trimmed to 700,000 over four years and the Federal Community & Regional Development loan and grant system will be abolished.
Super Tuesday. Throughout the US South, citizens go to vote for their favoured candidates in the largest electoral exercise outside a general election. On the Republican side, it is a landslide in favour of President George Bush, with him taking every delegate available. On the Democrat side, four different victors emerge. Senator Al Gore takes the states of Arkansas, Nevada, North Carolina, Oklahoma and Tennessee. Dick Gephardt bounces back and wins in Missouri. Reverend Jesse Jackson gets Mississippi, Georgia, Texas and Alabama. Governor Michael Dukakis takes the lead in Florida, Idaho and Washington. By the end of the day, President Bush stands less than one hundred delegates from victory with most states yet to vote. The Democrat race stands in confusion: Jackson and New York Governor Mario Cuomo lead the tally, with Dukakis a good chance. Gore and Gephardt have both failed to make the impression desired.
It becomes clear that Representative Richard Gephardt will not have the support to take the Democratic candidacy, and is unlikely to remain in the nomination process. In effect, the race is reduced to Cuomo, Jackson, Gore and Dukakis. Among the Republicans, it is becoming clear that President Bush will wrap up the nomination in six days. During the campaign, Gephardt has become regarded as someone with great ambitions, but few convictions.
Reverend Jesse Jackson wins the Alaska primary, closing to within twenty delegates of Governor Mario Cuomo. On the same day, US headlines report that the US District Court has overturned federal guidelines which forbid family planners from mentioning abortion.
With candidates turning out in three states today, Rev Jesse Jackson is seen as the victor in the Democratic races, taking Virginia and South Carolina, leaving South Dakota to become the first state to give a victory to Governor Mario Cuomo. By day’s end, Cuomo is still ahead of Jackson on delegates, but Jackson has accumulated victories in eight states and is only ten delegates behind.
Governor Michael Dukakis wins the Democratic Party primary in Nth Dakota, but remains about two hundred delegates behind the leaders. There are suggestions that Dukakis may withdraw from the race if he falls any further behind.
President George Bush wins the Republican primary in Illinois, giving him the majority of delegates for the convention and guaranteeing him the party’s nomination for President. With the clear defeat of Robert Dole and Pat Robertson, the remainder of the Republican Party will swing behind the President and he wins every primary from now until the end of the season. In the Democratic primary, things start to improve for Cuomo, who takes the state by a small margin.
Governor Michael Dukakis wins the Democratic primary in Minnesota. Second place goes to Mario Cuomo, who begins to reinvigorate his lead over Jesse Jackson, moving fifteen delegates ahead of the civil rights leader. It is a week to the next primaries in Rhode Island and Michigan and all three candidates are determined to stick it out to the end.
US Vice President John Heinz criticises Senate Minority Leader, Bob Dole, for allegedly pushing the White House to dump him at the convention. The supposed replacement candidate is Elizabeth Dole, the wife of the senator and former Cabinet secretary. He states that Mrs Dole has antagonised feminists by dropping her support for the Equal Rights Amendment and states his intention as Vice President is to remain “quiet, competent and loyal to a fault”.
New York Governor Mario Cuomo admits in an interview that the Democratic Party nomination process is uncertain. “Yes, I believe I have gained a half-step on everyone this week, but there is still a lot of work to do,” he states. Meanwhile, Senator Al Gore projects, during an interview on the future of the race, projects he will run again in 1992 and that he hopes, by that stage, that he will have “sufficient resources to be more than just a Southern candidate”.
Governor Michael Dukakis questions the motivation of those voting for Jesse Jackson, stating that he is “incapable” of being on the party ticket. He cites surveys which show that 1 in 5 Americans have stated they will “never” elect a black President and states that Jackson has “too much baggage”. Other recent polls show that between 37% and 45% of registered voters said they would not vote for the Democrats if Jackson was on the ticket. A full third of these admit that their decision is based on race.
First Republic Bank, the largest state bank holding company in Texas with assets of $33.2 billion, confirms that it has taken $1 billion from the Federal Deposit Insurance Company. The company’s attempted rescue of Interfirst Bank late last year appears to have been a failure, burdening it with nearly $2.7 billion in bad debts.
US President George Bush states that he will veto any “rushed and mishmash trade bill” put up by the Congress this year. The so-called Omnibus Foreign Trade and Competitiveness Bill, a push to restrict the power of the Executive Branch by forcing it to thoroughly examine trade relationships, will die on the floor on the House of Representatives.
Rhode Island and Michigan hold their Democratic primaries. Dukakis wins in the former state, but the larger state of Michigan goes to Reverend Jesse Jackson.
With the final primary of the month in Connecticut won by Dukakis, Richard Gephardt announces he will withdraw from the race, endorse Mario Cuomo as President and will instruct his delegates to vote for Cuomo at the party convention. In doing so, he boosts the lead of Cuomo. The delegate count at the end of March is: Mario Cuomo, 714; Jesse Jackson, 625; Michael Dukakis, 435; and Al Gore, 106 delegates. Democratic Party chairman Paul Kirk states that, if there is no consensus by early June, he would seek a meeting with all candidates to urge support behind a “unity candidate” among those whom the media are labelling “the living dead”.
Rev Jesse Jackson and Senator Al Gore hold a joint press conference in which they condemn recent comments by Governor Michael Dukakis as “racist”. Gore states that, while Dukakis “has the money, he does not have the message, authenticity and soul of my colleague”. It suggests that Gore and Jackson may have already reached an agreement to cooperate against their northern competitors. Jackson also calls for the Democratic Party to coalesce around one contender, stating that the party is no closer to a nominee after 29 primaries than they were at the beginning of the process.
Northwest Airlines goes beyond federal regulations to become the first major air carrier in the world to ban tobacco smoking on all its flights, starting from tomorrow. The company executives concede that it will drive away some customers, but express a belief that the stand will win them many new customers from the anti-smoking lobby.
US Attorney General D. Lowell Jensen announces a plan to tackle the growing mess in the US insurance industry, stating that the threatened collapse of the US tort system demands reform. He calls for the creation of special medical courts to decide on compensation for medical malpractice, but that people will be able to appeal for a jury trial if they are dissatisfied with the outcome. To reduce the jury option, the statute of limitations of actions is reduced to three years. He also calls for the establishment of caps on so-called “punitive awards”, but states that he hopes for a bipartisan approach in determining what is reasonable. Jensen rejects media criticism of the insurance industry, stating that the Administration has a list of 126 private insurers who have “failed to meet minimum requirements”, but pointing out that there were nearly fifteen thousand private insurance companies in the US.
US entertainer Merv Griffin trumps property developer Donald Trump to buy Resorts International, the Atlantic City-based hotel and casino operator. Trump, who has been slowly buying control at $22 per share, is faced with a $34 per share counter-offer by Griffin, who is building an entertainment empire and has recently purchased the Beverley Hilton for $98.6 million.
US President George Bush states that he will extend the immigration amnesty reporting period until 4 July on the advice of his staff. He reminds illegal aliens that this is a “once-in-a-generation opportunity to obtain citizenship on Independence Day”. He also extends the information and publicity campaign to strengthen sign-up, offering free tortillas in Dallas and mariachi bands in Houston.
John Sculley, the President of Apple, states that his company been compensated for the intellectual copyright for the graphical-user interface format by Soviet authorities, but that Microsoft, IBM and Hewlett Packard have not been prepared to do the same. He files a federal law suit against the companies, hoping to derail the plan to put the Windows products on IBM machines.
Governor Mario Cuomo wins the Democratic primary in Colorado. For the first time, Cuomo now has a lead of more than one hundred delegates over Jesse Jackson in the race to the convention. He confidently tells his supporters that, “from here, that lead can only grow” with the New York primary just around the corner.
US merchant bank Saloman Brothers announces that, due to serious profit losses resulting in its mortgage trading section last year, it will be forced to close down the operation. One of those who forced to jump for new employment is David Stockman, former head of Reagan’s budget office and a critic of Reaganomics.
US drug czar Jack Lawn announces a new program has been approved by the National Drug Policy Board. It lifts the penalty for carrying small amounts from a fine to a misdemeanour offence, with a compulsory drug treatment course. Failure to compete the course will lead to a felony charge.
Governor Michael Dukakis takes the state of Wisconsin. It is widely noted that, while he is still in third place, he is currently projected to hold the balance of power at the convention between Mario Cuomo and Jesse Jackson. Dukakis has been promoting himself as the anti-Jackson candidate, taking the “hardline” against “radicals” within the Democratic Party. Despite suggestions that Jesse Jackson has been seeking a 25% cut in military expenditure, today he denies this, stating that he would seek a 10% cut. He attempts to turn attention back to his plan to allow public pension funds to buy government securities, stating it would give the Administration the ability to raise an additional $60 billion a year in domestic investment.
New York Governor and presidential candidate, Mario Cuomo, praises the cooperation of Italian authorities in a major Mafia drug bust. He suggests that his record demonstrates the effectiveness of his approach in the War on Drugs.
Former US President Ronald Reagan and his wife, Nancy, purchase a new home, a prestigious ranch in Bel Air, California. It is clear that the couple did not have the financial resources to afford the new home, and it becomes apparent over time that the Reagans have been assisted by friends and political donors.
US Secretary of Housing and Urban Development, Samuel Pierce, wins a major victory in Cabinet, convincing the President to add $3.4 billion to the deficit for subsidisation of federal housing. This amount includes $3.0 billion for construction of new homes and the remainder for rent subsidies for people who are currently homeless.
It is revealed that New York Governor Mario Cuomo and Massachusetts Governor Michael Dukakis have met to discuss the potential for a joint ticket. However, it will later emerge that the two camps were unable to reach an agreement due to their inability to reach a common position.
US officials express concern regarding the growing Japanese investment in Hawaii real estate, created as a result of the low value of the dollar. This takes place during talks between the US and Japan on a new agricultural agreement to improve access to each other’s markets. Local officials in Hawaii have complained that the rising price of real estate is increasing land tax assessments and driving long-term residents out of their homes when they suddenly find themselves unable to pay the tax bill.
As Wal-mart overtakes JC Penney to become the third largest retailer in the United States (after Sears and K-mart), the retail industry reports that the long-running consumer spending spree appears to be beginning to dry up. They also indicate that margins are falling rapidly and call for the Administration to increase spending over the coming year and suggesting the deficit focus is “ill-advised”.
Arkansas Governor Bill Clinton complains that Jesse Jackson is destroying years of work on behalf of officials to convert the Democratic Party in a “non-ideological and centrist” party. He calls for tougher media standards to be applied to Jackson, stating that politicians cannot be allowed “to scoot through to the Oval Office without proper scrutiny”.
US Attorney General D. Lowell Jensen announces that he will step down from his position in January next year, regardless of the election outcome. A Reaganite appointment from California, it was not expected that he would be appointed to a Republican Administration post-election. The announcement will allow him to step aside without controversy should Bush get re-elected.
During a conspiracy trial against members of a US white supremacy group, the jury decides that the chief witness for the prosecution has created a fictional story about plans for an anti-Zionist coup in the Pacific Northwest in order to obtain a lesser sentence on a racketeering charge.
US President George Bush officially recognises the role of Matthew Henson in the 1909 expedition to the geographic North Pole. Henson, an African American, had been relegated to a nominal place in the history of the Peary expedition due to his race and today a granite plinth is raised to honour Henson in Arlington National Cemetery. His body is reinterred and, in 1996, he will have a US Navy ship commissioned with his name.
US televangelist Jimmy Swaggart is defrocked by the Assemblies of God, crippling his $140 million per year business. He states that he will return to the pulpit nonetheless in late May “unless the Rapture occurs first”, despite specific instructions he is to take a year sabbatical.
Michael Dukakis wins the Arizona primary for the Democratic nomination. He still trails Jesse Jackson by more than 170 delegates and Mario Cuomo by nearly 220 delegates.
Jesse Jackson claims a victory in the Delaware primary, but his win, and Delaware, are insufficiently large to make a major impact on the delegate count.
Mario Cuomo wins his home state, New York, by a convincing margin, doubling his lead over his nearest competitor, Jesse Jackson. On the same day in Vermont, Michael Dukakis picks up another state to add to his tally.
The US Federal Aviation Authority releases information which finds a flaw with the Boeing 747 jumbo, with fuel lines given to leaking into the cargo hold. Both Japanese Air Lines and British Airways are shown to have had fires during flight as a result. Of those examined thus far, one in ten have the fault and it means additional costs to the US airline industry, particularly Continental and Eastern, who lost hundreds of millions of dollars last year.
US Democrats sponsor controversial legislation which would institute FBI background checks for people who want to purchase a firearm. The National Rifle Association loudly criticises the move, stating that it simply will make the process of exercising Second Amendment rights more expensive and will not prevent weapons getting into the hands of criminal.
First Republic Bank, based in Dallas, admits that the $1 billion taken from the FDIC last month will be insufficient to prop up the company. The chairman and board are forced to resign by federal regulators before they extend a further $400 million in assistance.
Governor Michael Dukakis puts forward a plan for the nation’s first comprehensive health insurance scheme. While it will not require businesses to provide health insurance, it specifies that companies which do not must contribute to a national government health insurance fund up to a maximum of $1700 per employee per year. Critics are concerned the plan will damage the US economy and cost up to $150 billion each year.
Reports on the Democratic hopefuls indicate that Governor Michael Dukakis has the largest remaining war chest, perhaps as large as $30 million. Supporters state that he has the ability to spend up big in the next month and that victories in California, Ohio, Pennsylvania and New Jersey, yet to be decided, will put him in the lead before the end of the primary season in the first week of June.
Michael Dukakis wins Utah, the final state to be decided in the Democratic race this month. At the end of the month, the delegate count for the candidates stands as follows: Mario Cuomo – 911 delegates; Jesse Jackson – 755 delegates; Michael Dukakis – 616 delegates. Al Gore, who is no longer actively campaigning, remains on 106 delegates.
Disney chief Michael Eisner announces profits of nearly $450 million for last year on revenues of close to $3 billion. After coming close to collapse only four years ago, it indicates a wondrous financial turn-around for the entertainment giant. Its market share of box office revenues has risen from 3% to 30%.
US Senate Majority Leader Robert Byrd announces that he will step down from his decade-long leadership when the Senate reconvenes after the November elections. Scuffling begins immediately to replace him in the caucus and three likely candidates emerge. The favourite for the position is Daniel Inouye of Hawaii, but he is likely to face strong challenges from Bennett Johnson of Louisiana and George Mitchell of Maine.
There is double-barrel bad news for the US economy. The US dollar falls two percent against the deutschemark and the yen after the February trade deficit comes in at $10.6 billion, an increase of $1.2 billion over the shortfall recorded in January. The Dow Jones responds by falling nearly one hundred points in the morning, the fifth largest one-day fall in its history. Any hope for a rebound disappears when March inflation figures come in at 0.7%, translating into projected annual inflation of nearly 8%, with the market closing at 1933.37 points. Treasury Secretary Nicholas Brady points out that the gap is considerably less than the October high and exports continue to rise. He admits that it makes it increasingly likely that interest rates will go up in the short term but also states that current interest rates are already historically low. Fed Chairman Walter Wriston will increase the discount rate to 5.5% within days to protect the dollar and guard against inflation.
A small piece of New York’s Williamsburg Bridge falls off into the East River, forcing the state authorities to declare it unsafe for road and rail transport. President George Bush comments on what would otherwise be an insignificant issue, stating it is the result of years of neglect by the Cuomo state administration, causing deterioration of infrastructure. He draws comparisons with Boston, where bridges and tunnels downtown are routinely jammed while Dukakis promotes rail.
The US Federal Savings and Loan Insurance Corporation reports a deficit of $11.8 billion deficit for the year, but the number of thrifts in crisis has stabilised, deposits are up by $10.6 billion and it appears as though a purchaser has been found for California’s American S&L Association, the nation’s second largest thrift. It appears as though the long-running financial crisis may be coming to an end.
There is growing concern as a strike by the Writers Guild of America nears two months in length. Shows such as LA Law, The Cosby Show and Moonlighting are all forced to cut scheduled episodes and the three major networks estimate they could suffer a revenue falloff of as much as $100 million.
Governor John Sununu of New Hampshire denounces a manual designed to teach sex education to teenagers. He is most offended by a passage which advises students that “gay and lesbian people are perfectly normal”. Sununu cuts funding for family planning clinics which designed the manual and suggests that “we should never have let those guys (gay people) out of the closet; we should put them back in”.
Democratic Party chairman Paul Kirk calls a meeting with the three surviving candidates after polling shows that a majority of Democratic supporters will not vote for a ticket carrying Jesse Jackson. Jackson reveals the contents of the meeting and states that, with his delegate count, “I have earned the right to serious consideration”. It has become clear that no candidate will be able to claim an absolute convention victory.
It appears as though the so-called Williamsburg Bridge incident is having an effect on the Cuomo campaign, after Governor Michael Dukakis wins the primaries in Indiana and Ohio today. The margin between Dukakis and Jackson is reduced from 140 delegates to 100 delegates in one day. In response, Cuomo and Jackson pour their remaining resources into the four primaries to be held this Sunday. On the other side of the political divide, polling of “favourable” and “unfavourable” for President George Bush show 51% and 39% respectively, with 49% of independents viewing the President in a positive way. The corresponding positives among Republicans and Democrats are 83% and 31%.
Speculation begins to open on whom each of the individual Democratic candidates might choose as Vice President if they succeed in convincing the convention to nominate them. The key names being circulated include Senator Sam Nunn, Governor Richard Celeste and Senator Lloyd Bentsen.
The US National Transportation Safety Board confirms media reports regarding a recent cancelled flight by Aloha Airlines after a passenger noted a major crack in the front port side passenger door which had been completely missed by the airline’s maintenance crews. It states that it has order additional safety checks must now take place on all aircraft, particularly as they age and admit that, had the flight taken off, the fuselage would have failed at multiple points.
The US Immigration Service announces that it has received over 1.9 million applications as part of the amnesty program extended by President George Bush. Bush tells journalists in Moscow that this 4 July will be the largest citizenship ceremony the country has ever seen, but rejects as “cynical” suggestions that he is attempting to boost his share of the Hispanic vote in November’s election.
Four US states, Massachusetts, Louisiana, Kentucky and Maryland, conduct their Democratic Party primaries. The major surprise is that Governor Mario Cuomo narrowly defeats Governor Michael Dukakis in his home state. Analysts point to a massive spend by Cuomo in the final days as the reason for his victory, but also agree that Cuomo’s campaign may have run out of money and that he is hoping his momentum will carry him to victories in the larger states to be contested later this month.
One of the US Navy’s last four diesel submarines, the USS Bonefish, experiences a minor explosion while travelling at periscope depth off Florida. Over twenty percent of the crew is hospitalised and three crewmen are killed. After investigation, it is agreed that the entire class will be retired. Bonefish is too damaged to be repaired and will be scuttled.
New figures released by the US Labor Department show that unemployment has fallen to just 5.0%, down 0.4% in just the last two months. It makes a rise in interest rates almost unavoidable.
Governor Mario Cuomo appears to have bounced back with a victory in the Nebraska primary for the Democratic Party, while Governor Michael Dukakis wins in West Virginia.
Governor Michael Dukakis comes under attack as it revealed that his “economic miracle” in Massachusetts is headed into a substantial budget deficit. It leads to a presidential spokesman describing Dukakis’ record as “the greatest con job in American politics”. Dukakis hits back, suggesting that it needs to be put in perspective against the size of the federal budget deficit.
Delegates belonging to Reverend Pat Robertson begin a brawl with delegates of other candidates in a meeting in North Carolina. It places questions over the unity of the Republican Party, with a local Democrat sheriff suggesting that he is investigating the local branch of the Republicans to determine if charges should be laid over the affair.
Doctors at Walter Reed Medical Hospital announce that they are prepared to release early Democratic frontrunner Senator Joseph Biden after three months of hospitalisation. They state that Biden will be able to resume light duties in the near future.
Coleco, the toy company responsible for Cabbage Patch Kids and Trivial Pursuit, admit that its heavy investment in home computer game consoles has created a flow of red ink that has dragged down the firm. Unpayable debts are estimated at $300 million.
Former White House Chief of Staff Don Regan reveals that the former President, Ronald Reagan, and his wife, Nancy, were in the thrall of a San Francisco astrologer who “wreaked havoc on the schedule”. He states that, at times, the President became a prisoner in the White House because of guidance by the astrologer. He calls the former President “disturbingly passive and vulnerable to manipulation”, while labelling his wife as “a dark and mean-spirited woman”. The former First Lady responds by stating that “I was also terribly unprofessional when I allowed cleaning up the sock drawer to distract me from cleaning up US-Soviet differences on nuclear missiles”. She also jokingly calls for former First Ladies who were involved in séances (Lincoln, Wilson, Harding) to be “dug up, drawn and quartered” to ensure that the spirits they raised “don’t interfere in the efficient running of government”.
In an interview of Republican and Democratic candidates, all agree that it is time for the US Federal Government to take up the role of assisting parents with child care. It is prompted by statistics which show that, for the first time, a majority of mothers with children under six years now hold employment. There is a dispute over the level of support, but it appears that whoever makes it to the White House in January will be initiating a child care program.
As part of the ongoing review following last year’s stock market correction, the major Wall Street investment houses announce that they will no longer engage in the practice of index arbitrage unless specifically requested by individual customers for their portfolios and are particularly critical in their joint report of “legging”, delaying transactions within the exchange process. The sole exception is Bear Stearns, whose executives argue that it is a vital speculative investment to balance prices between the stock market in New York and the futures market in Chicago. It emerges later that the decision was forced by threats from insurance giant AIG to stop doing business with the investment banks if they continued.
A US corporate survey indicates that companies intend to hire ten percent more graduates this year than they did in 1987. It indicates clearly that last year’s crash has done little to shake the continuing expansion of the US economy, but also shows that students are avoiding Wall Street recruitment for other non-business fields.
The Federal Reserve Chairman, Walter Wriston, moves interest rates up to 6%, a rise of fifty basis points, stating that the increase is vital to see off newly-emerging threats from inflation. Republicans claim that rising interest rates could drop a political bombshell into the middle of the Bush campaign and suggest that the decision was unwise. He points to the so-called Phillips curve, which predicts that as unemployment falls, wages and prices are driven upward, and points to accumulating claims by trade unions for wage increases of up to 6.5%. Major banks follow, raising their prime lending rates to an average 7.5%. The Dow Jones responds by falling to 1910.93 points, after having been close to breaching the 2000 mark again for the first time since October.
In Oregon’s Democratic primary, Governor Michael Dukakis scores another win, but remains in third place overall.
President George Bush gives an address in which he defends the Reagan Administration from its critics, including those like former Chief of Staff Don Regan who have recently released memoirs critical of the former First Couple as individuals. Democratic candidate Governor Mario Cuomo responds that Bush is the “last loyal lackey of the emperor with no clothes”.
Lorimar Telepictures, makers of Dallas and Knots Landing, is purchased by Warner Brothers Communications for $1.18 billion after they outbid 20th Century Fox by a substantial margin.
In the last Democratic primary for the month, Governor Michael Dukakis claims victory in the state of Pennsylvania. At the end of the month, the delegate count is: Mario Cuomo – 1256; Jesse Jackson – 1003; Michael Dukakis – 947 delegates. There remain the 106 delegates remaining from Senator Al Gore’s campaign, which have not yet been allocated, and less than five hundred delegates remaining to be distributed in upcoming primaries. It is now a definite that the Democrats will go into the convention without a candidate.
US President George Bush addresses a recent survey among high school seniors and university students. The numbers which have tried cocaine, including crack, have fallen from 11.7% in 1986 to 6.3% today. More significantly, 52% view cocaine as risky compared to only 35% two years ago. He states that the drug culture of the 1960’s is in retreat and criticises a recent report by economist Milton Friedman which recommends the decriminalisation of marijuana. Friedman has argued that doing so will immediately add $12 billion to the budget’s bottom line.
There are three arrests by the US Secret Service in Missouri. A white supremacist group, calling themselves “The Army of the Sword of the Lord”, are alleged to have been plotting a trip to Montana to assassinate candidate Jesse Jackson and have purchased a cache of rifles in order to carry out the murder. Jackson limits his comments to a simple statement that “prejudice naturally excludes understanding”.
A report on the US trade deficit for March shows a figure of just over $8 billion, a far better performance than most economists had projected. It suggests that the low dollar is at last having a substantial impact. However, there are continued warnings that the economy may be overheating, with plants reporting they are reaching maximum capacity, and inflation for the last four months is now climbing above 4.8%.
Senate Majority Leader Bob Dole calls for tighter controls on political action committees, stating that donors expect “something in return other than good government.” He hints that he is aware of some legislators flip-flopping on issues after receiving contributions and being handsomely rewarded shortly after key votes, despite claiming independent thought at the time. He quickly withdraws the comments as it becomes clear he was too candid, stating that he knows of no blatant corruption and that he misspoke, meaning to say that donors expect “nothing in return other than good government”.
Reports by the US tourist industry show that the low dollar has led to a ten percent rise in the number of overseas visitors, with the largest increase coming from Japan, whose numbers are up by 32%.
The US Congress passes the greatest expansion of Medicare since its creation in 1965. To prevent catastrophic loss, it allows for unlimited free hospital care after a $590 deductible is reached, and places a $1400 limit on doctors’ fees and pharmaceutical costs. The expanded coverage is estimated to cost $32 billion over the next five years. It passes the Senate 89 votes to 9, and the House of Representatives by 331 votes to 69.
The Pentagon is upset when Secretary of Defense Dick Cheney confirms that he will zero-out spending on the V-22 Osprey project. Cheney argues that V/STOL research has never proven itself to be productive for any country and that there remains a need to contain the budget deficit. He further claims that the UH-60 Black Hawk and CH-53 Sea Stallion are capable of filling the void. While the Marines will still get their helicopters, Cheney will be perceived as getting them faster and at half the cost by bypassing the Pentagon brass.
Democratic hopeful Governor Mario Cuomo announces the enforced takeover of the Shoreham nuclear plant for $1 from Long Island Lighting Company, giving the state 500 acres of Long Island waterfront. He tells Americans that the bankrupt company’s assets will be used to raise money to oversee the dismantling of the nuclear plant. He states that the area remains well served by the nearby coal plant. However, it gives his opponents the chance to once again question New York’s crumbling infrastructure.
Sources within the camp of Governor Mario Cuomo leak polling which shows that the state of California is “up for grabs” for the first time since 1968, with polls showing the Democrats and Republicans neck-and-neck despite the fact that the Democratic nominee is yet to be named.
Media reports that the Democratic Party hopefuls will be meeting in San Francisco, California, in three days in an attempt to sort out a candidate prior to the convention. The results from the last four primaries are not expected to make a significant difference.
The Democratic primaries come to an end, with a surprise twist. Governor Michael Dukakis moves into second place overall, displacing Reverend Jesse Jackson by sixteen delegates after winning all four contests. However, there is little prospect of a joint ticket among the three leading contenders and Senator Al Gore still insists upon standing at the convention unless they can.
US President George Bush visits a Los Angeles night school, where illegal immigrants are in government-sponsored classes to teach English and US history. He wishes the students well as they prepare to take advantage of the President’s amnesty and become citizens in July.
After a teacher is stabbed at an elementary school, the fourth attack on a teacher in recent weeks, Governor Mario Cuomo of New York announces the installation of metal detectors, an increase in police numbers to regularly patrol school districts and expulsion of students aged sixteen or over who use violence. School assaults will fall dramatically over the next eight years.
Democrat talks designed to reach a resolution for the differences between the various presidential contenders fails to achieve any outcome. Senator Al Gore tells reporters afterwards that he believes that support is already “fluid” and that, just because Mario Cuomo currently has the greatest numbers, it does not guarantee the New York Governor the nomination.
There are protests in Virginia as the nation’s largest shopping centre developer announces plans to build a massive shopping centre on the Civil War battlefield of Manassas. Local government officials state the shopping centre will only adjoin the battlefield on “historically insignificant” territory, but Congress will disagree and eventually compulsorily seize the land, at a cost of $32 million in compensation.
Senator Sam Nunn, chairman of the Senate Armed Services Committee, praises US Defense Secretary Dick Cheney, stating he has shown “exemplary leadership” in his efforts to cut the budget deficit. Cheney has decided to retire a ballistic missile submarine, 130 planes and 560 helicopters, as well as cutting military personnel numbers (including civilian administrators) by 60,000 people. However, this has enabled him to fund a number of new projects and still cut expenditure by close to $30 billion.
Two more savings & loans thrifts go under in California, forcing the Federal Savings and Loan Insurance Corporation to pay $1.35 billion to rescue their depositors. The FSLIC has now paid out $22 billion in the past three years to restore the thrift industry to health.
US Democratic hopeful, Governor Mario Cuomo, under pressure from the media, rules out Michael Dukakis or Jesse Jackson as a potential Vice Presidential nominee. However, he does not rule out concessions to either party in order to obtain the support of their delegates.
Following a three-year study, medical researchers in the United States establish that formula feeding and cigarette smoking are the two primary causes of postnatal depression. This is the first major study into the depressive illness and rules out family planning, economic assistance and single parenthood as major contributions.
The Securities and Exchange Commission files civil charges against merchant bank Drexel Burnham Lambert and its chief trader and bond king, Michael Milken. US Attorney Rudolph Giuliani announces that he will be undertaking an investigation to determine if criminal charges should be laid over violations of insider trading laws.
US Commerce Secretary Barbara Franklin proposes that the quotas on imported steel and sugar be phased out over the next ten years in order to reduce costs to American businesses. She also buys into recent controversies about how to cut this year’s deficit, suggesting that an increase in the gasoline tax by 20 cents per gallon would be a dramatic first step, but should be linked to rebates for those most disadvantaged. The White House quickly distances itself from the latter proposal.
There is speculation that US Vice President John Heinz will be replaced by former Senate leader Howard Baker at the Republican convention. Baker immediately scotches the rumour, stating that “there isn’t even the remotest possibility. I don’t expect it or want it.”
In a court case in New Jersey, a jury finds that cigarette manufacturer Liggett Group directly contributed to the cancer death of a smoker. It is the first time that a tobacco company has been found partially liable and ordered to pay damages.
The FBI unveils a report into corruption and bribery in the process of Defense Department procurement after a two-year investigation. It states that over one hundred people will be charged, including a former Navy Secretary, three other Administration officials and a retired admiral. Defense Secretary Dick Cheney defends the Pentagon, stating the corruption concerns individuals, not the institution as a whole.
US Agriculture Secretary Richard Lyng warns that the country is facing its worst drought since the 1930’s and that without substantial rainfall, the country faces the costliest national disaster in its history. The last four months have seen the lowest rainfall on record and irregularities in sea temperature, created by the contributions of last year’s El Nino event.
The US Customs Service seizes 350 lbs of cocaine on an Avianca Airlines flight arriving in Miami from Bogota. The airline is fined $7 million and its cargo flights are suspended until further notice.
US President George Bush criticises Governor Mario Cuomo, pointing to a state deficit that will exceed $1 billion this year, and Governor Michael Dukakis, criticising him for raising $115 million in new taxes. The two Governors hold a joint press conference in response, stating that “George Bush leads an administration that has had more red ink than everyone from Washington to Carter combined”.
The US Supreme Court rejects argument, by 5 votes to 4, to review the 1976 decision of Runyon v McCrary, effectively upholding the view of the lower courts that private institutions are not permitted to discriminate against their employees on the basis of race at any time. The case being appealed had attempted to argue that racial discrimination in the workplace after employment was acceptable in some cases.
Days after the US Justice Department confirms that it is investigating fundraising payments made to members of the House of Representatives, the Majority Whip, Tony Coelho (D-CA), resigns. While he has not committed any crime, Coelho falls on his sword to avoid scandal damaging the Democrat campaign to gain a supermajority in the Senate. He confirms that he will not contest his district in November, ending his ten years as a Representative.
Chevron Corporation, the new energy company formed from the 1984 merger of Standard Oil and Gulf Oil, announces that it is acquiring the surviving assets of Texaco. It ends Texaco’s history as an independent company and the retail branding will disappear entirely over the next three years.
The FBI investigation into the Soviet spy network in Unisys widens into corruption in the procurement process and charges are announced against Assistant Navy Secretary, Melvyn Paisley, and his deputy, James Gaines. Defense Secretary Dick Cheney states that the Navy is fully cooperating with the FBI investigation and admits that charges are likely against executives working for General Dynamics, United Technologies and McDonnell Douglas.
US President George Bush confirms that payroll tax will rise in this year’s budget, going from 6.06% this year to 6.87% by 1993. He claims that this is based on advice from actuaries in the Social Security administration, allowing the nation to create a $14 billion surplus over the next twenty years. He warns the Federal Reserve that this will have a negative impact on economic growth and that it should be fundamental in any future interest rate considerations.
Berry Gordy Jnr, the founder of Motown Records, announces the sale of the group to entertainment conglomerate MCA for $60 milliion, plus a percentage of all future sales of sheet music and home videos and DVDs.
Surgeon General C. Everett Koop rules that US doctors have an obligation to violate doctor-patient confidentiality if a person infected with HIV cannot be persuaded to advise their sexual partners. He recommends legislation, similar to that promoted by European countries, to make it a criminal offence not to report status.
The US trade deficit for April comes in at $8.7 billion, the lowest figure in three years. Most credit is given to the continuing low dollar, which currently stands at 149 yen and 2.03 deutschemarks, which is slightly up but still 50% below historic highs. International reserve banks are clearly keeping the dollar within this range.
White House Press Secretary Marlin Fitzwater confirms rumours that two members of the National Security Council staff and three Secret Service officers have been dismissed after drug testing in the White House. President George Bush states that he is upset, but that the finding underscores the need for mandatory testing.
US Attorney Rudolph Giuliani unveils a far-reaching lawsuit against eighteen executives of the International Brotherhood of Teamsters, charging that the organisation is a Mafia front. Senators from both sides of the political divide suggest the action is a dangerous precedent, as it would allow the government to take over management of a trade union.
US Education Secretary William Bennett announces his resignation from the Cabinet effective from 3 November, but makes clear that he will be available to serve in the next Cabinet as required. Some are expectant that he could find his way in as Attorney General after the departure of D. Lowell Jensen.
The US Labor Department reports that unemployment has fallen below 4.8% for the first time since the early 1970’s and expresses concern at a substantial shortfall in worker skills. In New England, the numbers are even lower, down to 3.1% unemployment. President George Bush states that the “migrant worker” program is now more important than ever. He outlines his plan for inflation control, which would limit the minimum wage to $4.35 per hour in 1991, and states the new welfare to work package will also alleviate some shortfalls. Senator Al Gore (D-TN) agrees, stating that, “we don’t have a person to waste in this labour market”, but calls for a $4.65 threshold for the minimum wage.
The US regulators propose new safety measures to prevent any shock similar to last October’s stock market fall. The first safeguard is that, when the New York Stock Exchange falls more than 100 points (or the Chicago Mercantile Exchange performs similarly), no new trades will be available for half an hour in New York or on the Chicago Mercantile Exchange. At the equivalent of 250 points on either exchange, trading will stop for the day.
Democratic National Convention opens in Atlanta. As it does so, the New York Times reports that there may have been a deal between the second and third place candidates, Governor Michael Dukakis and the Reverend Jesse Jackson, during a meeting in Boston which supposedly occurred a fortnight ago. Ann Richards of Texas gives the keynote speech on the opening night. Senator Bill Bradley denies an attempt to place him on the ticket.
Rev Jesse Jackson withdraws from the Democratic race. At a press conference, he states that the party has failed to embrace the social programs and political empowerment issues triggered by Reaganomics. He also warns that the federal deficit is “sponsoring” investment away from the cities. He begrudgingly bows to the inevitability, but it is not the graceful exit hoped for by party seniors. The leading candidate, Governor Mario Cuomo, states that he sees a future for Jackson in which he has “some freedom to move around and be involved in a whole series of issues” with some insiders suggesting Jackson may be considered as Secretary of State in a Democratic Administration.
Governor Mario Cuomo of New York is formally nominated as the Democratic Party candidate for President of the United States of America on the final day of its convention. He names Senator Al Gore of Tennessee, who represents the more conservative wing of the Democrats, as his Vice Presidential candidate. Gore has had a good personal relationship with the Rainbow Coalition leader and it is suspected he has been chosen to help Cuomo rebuild ties with Jesse Jackson. Former President Jimmy Carter also returns home to prevent a Democrat split.
US President George Bush arrives to campaign in California, where he eats cheese and apples for lunch in a park with a group of formerly homeless people who recently found new accommodation under his housing program. He states that the level of harassment of locals has fallen and that the so-called “hobo jungles” are slowly becoming depopulated.
US House Speaker Tom Foley proposes the establishment of a bipartisan commission to oversee the decommissioning of military bases. He argues that the nine-year rule requiring the Pentagon to submit environmental impact studies before closing any base has created a political impasse and must be removed. He outlines $5 billion of savings possible in the upcoming Budget and predicts that these monies could create 50% more jobs through direct local stimulus packages than by funnelling them through the military.
Democratic presidential nominee Governor Mario Cuomo gives his first major speech, stating that the Democratic Party has moved into a “post-liberal age”. He states that, while his party remains guided by the ideas of the Great Society, it has recognised that “practical adequacy” is more important than “ideological crusading”.
US President George Bush, campaigning in Illinois, exclaims that “the donkey has two heads”, suggesting that the Democratic Party is headed towards permanent schism with the liberals, post-liberals and the moderates all threatening to pull the party apart. He recalls the “voodoo economics” issue of the 1980 election to point out the differences between Cuomo and Gore are far wider than those between himself and Reagan at the time.
The US Agriculture Department reports that US corn, soybean and wheat production in 1988 will be down, mainly owing to the prolonged drought. Corn is down 23%; the other two have fallen by ten percent. President George Bush promises full support to drought relief, stating “We can’t make it rain, but we can help ease the pain.”
US Supreme Court Justice Harry Blackmun gives an address to a judicial conference in St Louis. During his speech, he describes his colleagues on the bench in less-than-flattering terms, but saves his harshest critique for Antonin Scalia, who he labels “an irritating ideologue”. He attacks former President Ronald Reagan for trying to establish a conservative bloc rather than giving the Court true independence.
An investigation into the pending collapse of Madison Guaranty, a savings and loan in Arkansas, leads into questioning of Hillary Clinton, the wife of the Governor Bill Clinton, over some “creative accounting practices”. Over the next two years, as investigations deepen, sixteen people will be charged, including close associates of the Governor. Criminal proceedings relating to the case will drag out even longer, killing Governor Clinton’s ambition to contest the Presidency in 1992.
California Governor George Deukmejian welcomes a new ordinance to save water, requiring all new houses to install dual-flush toilets as part of their construction. He estimates savings of 70,000 litres (and about $30) per family per year as the technology requires only 6 litres per flush rather than the usual 13 litres. These machines spread across the world and become the national legislative standard in 1990.
US Interior Secretary Manuel Lujan launches “Outdoor National Celebration Week”, promoting conservation in local communities. Most credit for the events go to the venerable outgoing director of the National Parks Service, William Mott.
Governor Mario Cuomo and his team take over an elevator in a New York hotel, pushing past an impatient crowd waiting for their ride. A particularly irked woman declares that Cuomo is “imperious, even for a New Yorker”. The criticism is replayed on advertisements by the Republican Party throughout the campaign.
The Us Federal Communications Commission proposes to lift restrictions which prohibit telephone companies from being able to offer cable television. There appears to be general support in Congress, but the matter is immediately moved to the US District Court to question whether the regional phone companies formed by the breakup of AT&T are legally permitted to undertake such activities.
The US Federal Communications Commission wins a case in the Federal Court allowing it to regulate interstate telephone services which obtain “obscene or indecent in nature”. The $2.4 billion phone sex industry fails to expand its operations outside California and there are suggestions that Sweet Sensations, the largest operation in the business, and Telesphere, the long distance carrier dependent on 900 numbers, both face bankruptcy.
It emerges that the US Environmental Protection Authority has authorised the dumping of waste off the continental shelf after large amounts of it wash up on shores from Massachusetts to New Jersey. New York Governor Mario Cuomo attacks the EPA. “This Administration thinks that we can continue to pollute our planet with impunity. The planet has sent George Bush a message in response,” he says. He points to anecdotes by professional fishermen about mutations and the threat to the shellfish industry. He suggests legislation to force dumping a further three kilometres off shore (raising the 19km limit to 22km), make companies develop plans to minimise the amount of sea dumping and oblige them to have detailed containment and cleanup plans, and bear costs for, any coastal pollution.
Colorado experiences the worst fire in its history, as lightning strikes kindle a blaze which consumes some 18,000 acres of forest. Wyoming is also experiencing fires not seen in fifty years.
Former US Defense Secretary James Schlesinger questions whether Governor Mario Cuomo understands crucial defence questions, pointing to his opposition to a number of programs. He also states that Cuomo’s defence plans, leading towards conventional over nuclear forces, “fails to recognise the costly reality” of the former and are seriously underfunded.
Rev Jesse Jackson and Governor Mario Cuomo hold a luncheon in Atlanta, in which the two men agree to put their differences aside. Jackson will receive a plane and a staff from the Cuomo campaign to enable him to activate his supporters, while it is pledged that some of his staff will have permanent places within the Cuomo campaign, as well as in any future Democratic White House. At a subsequent press conference, Cuomo describes Jackson as “a man who lifts us all through his dignity and the hope of his message”. He also endorses statehood for the District of Columbia.
34-year-old Oprah Winfrey, the former host of AM Chicago, celebrates when her relatively new program overtakes that of television stalwart, Phil Donahue, to become the most highly rated TV talk show on US television.
The US Drug Enforcement Agency reports that the price of cocaine has continued to rise, the going rate on the street now up to at least $160 per gram. This represents an increase of 7% in less than five months. US President George Bush states it is further indication of his success in the War on Drugs.
US President George Bush denies media speculation that he plans to dump Vice President John Heinz at the convention in favour of Senator Pete Domenici of New Mexico to balance out the urban ethnic appeal of Governor Mario Cuomo. “John has been a dignified and judicious partner,” he states, strongly defending his initial choice as continuing to be the best choice for the Republican Party.
In an OECD comparison of educational standards, the United States scores lower than any other country. It receives a ranking of 43 out of 100, compared to the highest ranking for Swedes, who achieve 73 out of 100. The report details tests applied to over ten thousand high school graduates in each country, the most notable being a geographical test which finds that over two-thirds of Americans are unable to find France on a map and three-quarters were unable to locate the Persian Gulf. Some Americans even suggest their own country is located in Australia or South Africa. Democratic nominee Governor Mario Cuomo states that the Republicans have “gutted” education spending and suggest that the United States needs to vastly increase its budgetary allocations to schools.
First Republic Bank, the largest bank in Texas, is taken over by the Federal Deposit Insurance Company (FDIC) with a rescue package of $4.4 billion, making it the second largest bank failure in US history. The bank’s failure stems from its own attempt to rescue Interfirst Bank last year. It will remain under federal management until 1990, when its assets will be sold off to a North Carolina bank.
The US Congress agrees to close down the Pentagon’s Office of Operational Testing and Evaluation on the recommendation of the General Accounting Office. The OT&E was established in 1983 by a legislature fed up with weapons that failed to deliver on expectations. Instead, it is now thought that the OT&E may be another “white elephant” after it repeatedly produces findings which “are inconsistent with the evidence” and “fails to fulfil its basic operational conditions”.
Officers are arrested at Merrill Lynch and Prudential Bache after federal investigators uncover an unusual insider trading racket. Two brokers, who are also personal friends, have been bribing the printer of Business Week for a look at its stock recommendations four days before they hit the street. It is eventually established that the printer took a payment of $15,000 for the information, but that the brokers made in excess of $100,000 from the tips.
US Attorney General D. Lowell Jensen warns banks in Florida that they will lose loan securities if they continue to deal with known drug traffickers. The warning comes as the FBI seizes $12 million in real estate belonging to a Bahaman shelf company.
Chairman of the House Defense Appropriations Committee, Bill Chappell (D-FL), comes under investigation in the Unisys spy affair. He is questioned by the FBI over his close relationship and potential leaking of sensitive information to a Unisys subcontractor making the MK-92 radar system. The system is being installed on all the Oliver Hazard Perry frigates. Congress begins to investigate the potential for raising the fine for insider trading from $100,000 to $1 million and Chappell is also placed under investigation. He will resist standing aside, and the investigation will be sealed when he dies in his House office in February next year.
US Senators David Boren (D-OK) and William Cohen (R-ME) are both accused of being “leakers” by White House Press Secretary Marlin Fitzwater, after the Washington Post publishes details about movements of Soviet forces in the Federal District of Moldavia and CIA analysis suggesting the Soviets may be preparing to invade Romania. Both men deny they are the source of the leak, instead blaming the White House. The Soviet government refuses to comment on the allegations, with Foreign Minister Alexander Yakovlev stating that the government prefers to focus on the final details of its chemical weapons agreement with the United States, currently being negotiated in Geneva.
Democratic presidential candidate, Governor Mario Cuomo, admits to the media that he plans to cancel the B-1 Lancer strategic bomber if elected. He appears at a press conference with Harold Brown, the Defense Secretary from the Carter White House, to explain his commitment to containing Pentagon costs and suggesting that even Air Force pilots support his idea to ditch the bomber.
US President George Bush announces a child tax rebate of $1000 per child, but states that it will not be necessary for parents to demonstrate they have spent the money on child care. At a cost of $2.2 billion, Governor Mario Cuomo describes the plan as “requiring every mother to have an accountant” to ensure a family qualifies for the rebate. He instead suggests a $2.5 billion plan to create federal child-care standards and to allow states to subsidise children in approved facilities. He also calls for Bush to “come out from under Reagan’s shadow” and bring the Republican Party to support for the Equal Rights Amendment, which he pledges to bring back to Congress if elected.
A Washington think tank study has recently revealed that 57% of the American population live in areas that are racially uniform and that over two million encounter racial discrimination in regard to housing each year. A federal court judge in New York brings the matter to public attention when he states that the Cuomo government has been resisting a court order that demands public housing be constructed or purchased in largely white neighbourhoods.
US President George Bush gives a campaign address on general policy outlook. He states that his views are not “simplistic” and suggests that his defining characteristic is “pragmatism”. He refuses to distance himself from recent media comments that he is a “Rockefeller Republican”, admitting that he is from the more “liberal and moderate” wing of the Party. He also states that he is sympathetic to the concerns of moderate Arab nation, criticising his opponent, Mario Cuomo, for “pandering” to Israel and being a “Gorby-gaga multilateralist”. He argues that he has offered, and will continue to offer, “cooperative and prudent” leadership of the free world, while choosing the “middle ground” at home. Governor Cuomo responds with his new mantra, “Where was George?”, referring to Iranian and Nicaraguan scandals in the Regan Administration.
Suffering from one of the hottest summers on record, the term “greenhouse effect” becomes increasingly used by weather reporters and talk back callers. Nine states have broken their record temperatures and Chicago, the worst affected city, has had an unprecedented string of days above 38°C (100°F). Added to the forest fires in the west, the drought in the Great Plains, the pollution of beaches on the East Coast and a recent EPA report showing US air quality is the worst it has ever been, it provides a platform for Democratic vice presidential candidate, Senator Al Gore. Gore also plays up reports of dying rivers, acid rain and the destruction of the South American rainforests. He states that, “sooner or later, we have to bring this mindless damage under control”.
Democratic presidential candidate, Governor Mario Cuomo, backs up environmental statements by his nominee for Vice President. He warns the Republican Party will “continue to stall on the environment” and is making “the most expensive public policy mistake in the history of the United States”. Vice President John Heinz replies that his opposite’s “secret plans” would quadruple the cost of water to the household consumer.
Reverend Jesse Jackson markets a new home video, called “Dreaming Again”, which covers many of the more inspirational speeches of his presidential campaigns in 1984 and 1988. By next month, he will admit that he earned profits in excess of $460,000 from just six weeks of sales, indicating the strong loyalty of his support base.
Hertz, the largest car rental company in the United States, admits to the Federal Court that it has overcharged customers and insurance companies for repairs to their cars, paying wholesale prices but charging retail. The company is fined $7.6 million and ordered to repay $15 million in restitution for victims of the decade-long fraud.
The 1988 Republican National Convention opens in New Orleans. The occasion is not nearly as eventful as the Democratic convention, with President George Bush guaranteed the nomination and presenting the Republicans as a united and coherent force. It is used to outline some election year goodies, including a $2.5 billion farm assistance package to assist those suffering from the drought and $1 billion in job training to deal with the increasing labour shortage. The meeting is blockaded by large number of anti-abortion demonstrators, calling on the Republican Party leadership to demonstrate greater opposition. When they are arrested, it is determined that the Rev Jerry Falwell is among their number.
New York Mayor Ed Koch announces new laws to severely restrict the ability of individuals to beg on the city’s streets. They make any physical contact by the beggar as assault, prohibit any blocking of public access to footpaths and define the usage of any enclosed space, including the subways, as intrusive and coercive. Homeless groups attack the regulation. Democratic candidate and New York Governor Mario Cuomo refuses to get involved, suggesting it is a matter for the Mayor.
An updated US Department of Agriculture report states that things are even grimmer in the drought-damaged heartland than was initially suggested by its first estimates last month. Corn crops will fall by 34% (previously 23%) and wheat losses are 20% of the harvest (double previous expectations). The report confirms what all of middle America knows: this is the worst drought in over a century.
US Defense Secretary Dick Cheney announces that the negotiations with the Soviets for an agreement to cut chemical weapons are close to resolution. He estimates that the treaty may save the country as much as $110 million per year and that Japan, Canada and a number of European countries have indicated they may be willing to sign up to the protocols as well. He also addresses anger over the recent Dubuque controversy in which a US Navy vessel abandoned Vietnamese refugees afloat in the South China Sea, pledging to court martial the captain.
US President George Bush accepts his party’s nomination, stating he has “both the resume and the rationale for four more years”. He pledges “to continue America on the path of peace and prosperity” and speaks of the “collective responsibility of citizens to society”, the former winning applause and the latter startling his audience as he warns that there is “a growing list of needs that can only be met by difficult choices, not through Democratic tax hikes”.
New York Governor Mario Cuomo shrugs off “the shrill and empty rhetoric” of the Republican convention, pointing out that President Bush also supports some tax increases. He refuses to countenance allegations that his “soft line” on defence will throw the relationship with the Soviets into a spin, stating that the US must provide incentives for continued Soviet action.
Federal Reserve Chairman Walter Wriston surprises the market by announcing that the discount rate will remain steady at 6%. Despite a rise in the unemployment rate to 4.8%, the market had noted high wholesale prices and expected greater restriction from the Reserve. Wriston argues that the price rise relates to the drought and that the Fed is comfortable with the current level of the dollar. However, some consulting firms state that underlying inflation is now at 5.3% and climbing and that, without firm action by the Fed, the situation will worsen.
US President George Bush meets in California with Barry Goldwater and his predecessor, Ronald Reagan. Asked about the contents of the discussion, Bush suggests he talked with Reagan about “a range of topics”, including fencing on the ranch and the restoration of the site formerly occupied by the presidential helicopter pad.
The Hunt brothers of Texas, multibillionaire owners of Placid Oil who attempted to corner the silver market during the 1980’s, are found guilty of conspiracy and fined $135 million to compensate for losses to one company. As this opens up the floodgates for over seventeen hundred other claims, it forces members of the family to seek bankruptcy protection.
A decade-long study of racism within the US judicial system determines that, while blacks and whites commit crimes in equal proportions, blacks far outnumber whites in the prison system. However, it also determines that the deciding factor is not race, but economic class, with affluence being linked to lenient treatment by police. In addition, wealthier families are able to afford counselling or special schools, making courts less likely to seek prison terms.
An analysis by political commentators in the New York Times divides up US states where one candidate leads by greater than five percent. They allocate 154 electoral votes to President George Bush and 102 electoral votes to Governor Mario Cuomo, with many key states still up for grabs.
After three months of declines in the troublesome trade deficit, the trade gap is shown to have widened in June, opening up to $10.8 billion. For the first six months of 1988, the US trade deficit is running at an annual rate of $125 billion, but this is a considerable improvement over the 1987 figure of $151 billion and the 1986 figure of $173 billion.
The US Federal Home Loan Bank Board, which regulates savings & loans institutions, announces a bailout of twenty Texas-based banks at a cost of $17.1 billion over the next ten years. The thrifts will be forced to consolidate and restructure. It is not clear when the haemorrhage from the US banking system will stop, but at least one in ten institutions are doomed and the number will only continue to rise if interest rates do.
Fires sweep through Yellowstone National Park in the middle of the hot, dry North American summer, destroying close to a quarter of the land. Some critics condemn the failure of authorities to contain the blazes, but other suggest that the fires are part of the natural ecosystem and are required to regenerate the park’s aspen trees.
Rev Jesse Jackson leads a march of 60,000 through Washington DC, marking the 25th anniversary of the landmark “I Have A Dream” speech by Martin Luther King Jnr. He is joined by Democratic nominee, Governor Mario Cuomo, but crowds are down from the 20th anniversary march in 1983.
US President George Bush questions the wisdom of his opponent in the campaign for November after a New York grand jury finds a “rape victim” he had supported, Tawana Brawley, had in fact manufactured the claims. Vice President John Heinz, commenting on the issue, suggests that Governor Mario Cuomo only backed Brawley in order to solidify African-Americans votes after his defeat of Jesse Jackson.
In a sign of a growing $30 billion market, the US Food and Drug Administration adopts a new “organic” classification, which tests for all pesticides and guarantees food purchasers that they are getting food completely free of pesticides. Supermarkets soon claim that the classification is a success, as do exporters to Japan. By the end of the century, “organic” produce will be a major industry for the USA.
FBI officials admit that the Medellin drug cartel has completely collapsed in the United States, with their rival, the Cali cartel, taking over control of Miami drug operations. FBI Director William Sessions admits that Colombia continues to have problems, but that “Cali corruption is preferable to Medellin terrorism”.
It is revealed that lobbyists have spent nearly $70 million influencing Congress over the last year, with the largest contributor being cigarette giant Philip Morris, who paid out $2.8 million.
US Treasury officials admit that the Consumer Price Index, a key inflation indicator, rose by 0.4% in July, pushing it to an annual rate of 5.2%. Secretary Nicholas Brady calls on those in the food chain not to gouge consumers and states he remains confident that inflation will be contained. He denies that there are any underlying economic problems, stating that the drought has caused a “temporary aberration” in food prices.
The US savings and loan bailout moves into Oklahoma, where fourteen institutions are rescued at a cost of $1.8 billion. The recent spending spree by the Federal Savings and Loan Insurance Corporation is an attempt to ensure everything is finalised before the end of the fiscal year on 30 September and ensure it does not contribute costs to next year’s budget deficit.
Amidst rumours of a shakeup in the Cuomo campaign, the New York Governor and Democratic presidential candidate attempts to turn the tide on the debate surrounding the lack of infrastructure spending in his state. He states that the nation is facing gridlock, with $5 billion in operating expenses and lost time for airlines alone. He blames the Republicans for failing to approve any new airports during their entire time in office and states that over 60% of all roads need urgent rehabilitation. He suggests the lack of infrastructure is pushing the inflation figure even higher by creating bottlenecks in the economy. To ease the problem, he proposes an increase in the gasoline tax, an increase in landing fees at airports and abolition of subsidies allowing tax-free parking, with the money poured into mass transport, including a maglev from Los Angeles to Las Vegas.
US Presidential nominee Mario Cuomo states the Republican White House has debased public education to such a degree that a quarter of military recruits cannot understand written instructions and US companies spend $155 million per year on remedial education programs for new employees. He points out that Bush’s “education plan” spends a third of planned spending on new weapons while global tensions are on the decline. He pledges a 20% increase in spending above inflation levels, including interest-free infrastructure loans, an expansion of Head Start and forgiveness of college debts for public school teachers, with a total cost of $16 billion. President Bush quickly points out that Governor Cuomo refuses to specify how he will pay for the increase.
US Attorney General D. Lowell Jensen reveals a massive anti-drugs operation involving thirty-eight countries operating across the last month. He reveals that 255 tons of cocaine and marijuana have been seized, along with over guns, boats and planes. Over twelve thousand people have been arrested and nearly two hundred cocaine labs destroyed. The Cali cartel has been heavily damaged.
Governor Mario Cuomo announces a new campaign manager in the person of former Chief of Staff, Michael del Giudice. Del Guidice takes leave from his position as Managing Director of Lazard, a multinational investment house, to run the campaign and immediately bring on board public relations guru, John Marino.
New polls released by a number of analysts show that Texas has firmed into the Republican camp, while Illinois is now very likely to vote Democrat. Key states remaining up for grabs include: California (47 electoral votes), Pennsylvania (25), Ohio (23) and Michigan (20). Latest figures indicate that President George Bush has 187 solid electoral votes, while Governor Mario Cuomo has 138 electoral votes.
Senator Joe Biden, who at one stage was the frontrunner for the Democratic candidacy, returns to work after a life threatening brain aneurysm, attending a party election fundraiser in his home state of New Jersey. Biden appears trim, energetic and tanned, and admits that he was fortunate to survive.
Citibank admits that its subsidiary, Primerica, has overpaid for Smith Barney last year before the October crash and agrees to sell both companies to Commercial Credit Group in order to clear heavy debt burdens. The new company, run by former American Express director Sanford Weil, will unite under the Smith Barney brand.
It is revealed that the Bush campaign manager, Lee Atwater, and one of his senior advisors, Charles Black, are partners in a firm providing consulting services to Prime Minister Lynden Pindling of the Bahamas. Pindling has been accused of taking bribes to allow his country to serve as a major hub for drug trafficking into the United States. Democratic candidate Governor Mario Cuomo calls on both men to resign or be dismissed.
Reverend Jerry Falwell, recently released after leading anti-abortion protests outside the Republican convention, uses his high public profile to demand a boycott of 7 Eleven stores. His complaint is that the stores carry Playboy and other such magazines as part of their product range. He also criticises teen magazines, such as Sassy, as “preparations for pornography” with such articles as “How to Kiss Boys” and “Is Being A Virgin Cool?”
US President George Bush and Governor Mario Cuomo agree on a televised debate in North Carolina on 25 September, giving American voters their first real chance to see the leaders without their canned daily messages and selected backdrops.
The Governor of Florida, Robert Martinez (R), embarrasses the Bush Administration when private correspondence leaks which criticises the President’s policy on Iran. Martinez initially denies the letter’s existence until it is published in the Tampa Tribune.
A federal judge, deciding a Mississippi case in which an individual was charged with usage of marijuana, rules that the drug is “the safest therapeutically active substance known to man” and expressing the opinion that it should be available to all Americans through prescription. While politicians from both sides attack the ruling, the judge confidently predicts that marijuana will be legal across the United States within a decade.
The US Congress passes a bill giving broad subsidies to the local textile industry, which already has the highest tariffs on any manufactured product, amounting to 18%. The bill demands that the White House cap increases in imports to a 1% increase each year. President George Bush states that he will veto the bill and states that current protections are already costing the average American family $240 per year in higher prices for clothing.
Governor Mario Cuomo intervenes to force the city of Yonkers, New York, to come under control of the Emergency Financial Control Board after the city council defies federal government regulations and federal court orders governing housing construction. US President George Bush wonders, “If the Governor cannot keep his own state in order, how can he govern the country?” after it is revealed that the whole scandal will cost the state nearly a million dollars in fines.
The American Savings and Loan Association of California, with assets of $31 billion, is taken over by a Texas consortium for $2.55 billion, with the market admitting that the bank is so ridden by bad debts that it has become “comatose”. Nonetheless, there is a general feeling that the run of bad news from US financial institutions may finally be coming to an end and that the era of reconstruction of the banking system may have begun.
The forest fires plaguing Montana have now claimed over 1.2 million acres, forced the complete abandonment of two townships and forced the Governor, Ted Schwinden (D), to cancel all hiking, fishing and camping activities in his state until further notice. He also postpones hunting season for the first time ever. President George Bush declares a state of emergency, allowing him to release $140 million in emergency funding for the state. Governor Schwinden points to recent reports about a warming global climate and suggests the “greenhouse effect” may be the cause of eleven thousand homes destroyed.
The long-troubled investment house, Drexel Burnham Lambert, is hit with further law suits, this time by the Securities and Exchange Commission, accusing it of fraud, insider trading, concealing ownership of stock for tax purposes and destruction of records to avoid investigation. The company is believed to be facing up to $760 million in fines.
US Vice President John Heinz declares that the Democrats are “soft on drugs” after the Chairman of the House Select Committee on Narcotics Control, Charles Rangel (D), states that a number of new anti-drugs proposal swept into a single bill are “anti-human and an assault on the Bill of Rights”. Senator Robert Byrd (D), the Senate Majority Leader, declares his support for the legislation, but Governor Cuomo, cornered by media questioning, appears to prevaricate, arguing that the bill’s $2.1 billion cost would doom popular proposals for child care reform.
Democratic vice presidential candidate Senator Al Gore states that “the Texas oilman”, President George Bush, has turned the Environmental Protection Agency, the EPA, into a “cesspool of ignorance and environmental disdain”. He also attacks Vice President John Heinz for his opposition to “measures to cut excessive oil consumption” – a code for a gas tax increase – and the President for his endorsement of exploration in the Arctic National Wildlife Refuge. Heinz responds that New York may be the filthiest city in the nation and that voters should look at “actions, not rhetoric” on the environment.
It is confirmed that US Education Secretary William Bennett has taken leave and has no appointments after tomorrow until Election Day. Governor Mario Cuomo of New York states that his salary should be terminated immediately and that the President needs to answer “why he has treated the American people with such contempt”.
US President George Bush, attending a press conference at which he announces the early departure of the Education Secretary, criticises the Democratic environmental plan, arguing that “higher taxes are the party’s solution for everything”. He suggests that the regulations governing motor vehicles, pushing up minimal standards from 25 miles per gallon to 50 miles per gallon over the next ten years would reduce energy consumption by 30% over the next decade, “without crippling American taxpayers”.
President Ronald Reagan re-enters the political arena, campaigning in solidly Republican areas of California and warning that the “trenchcoat liberals” will leave his legacy in ruins. He predicts to a partisan crowd that Bush will be the first former Vice President to be elected to the White House this century, seemingly forgetting that Nixon had been a former Vice President.
The US Equal Employment Opportunity Commissioner, Clarence Thomas, is forced to resign over a $12.5 million blowout on the cost of a new building for his federal agency. The additional costs relate to lavish fancy gold and marble touches and earn Thomas a Congressional condemnation that he has been a source of waste in an era of increasing frugality.
Congresswoman Pat Schroeder (D) introduces a bill requiring employers with more than fifty people to allow staff ten weeks leave to care for newborn or seriously ill children. When supporter and outgoing House Majority Whip Tony Coelho calls on Governor Cuomo to endorse the bill, President George Bush beats him to the punch and states a vote on the bill should be scheduled as soon as possible. The President is criticised by Congressman Dick Armey (R-TX), who states the Oval Office is supporting “yuppie welfare” and putting the country on the “slippery slope towards becoming Sweden”.
Following a court jury award against Monsanto over the intrauterine contraceptive device of its subsidiary GD Searle, company shares begin to plummet in hectic trade. They fall from $85.70 to $74.59 in one day and will continue to fall. The court recommends an investigation into former White House Chief of Staff and Illinois Congressman Donald Rumsfeld, who served as CEO of the company in the period related to the product’s release. Monsanto will seek Chapter 11 bankruptcy protection within the week, facing potential costs from lawsuits amounting to over $10 billion.
US President George Bush confirms reconciliation between the United States and the United Nations, stating that his country has made restitution of its overdue fees and that “the UN has directly assisted long-term objectives of my Administration through its advance of peace and freedom throughout the world”. In return, Secretary General Javier Perez de Cuellar suggests there was never any problem with the President addressing the General Assembly early next week. He also reveals that, for the past twenty months, the ambassadors of the permanent members of the Security Council have been meeting regularly in each other’s New York residences.
The Dow Jones Industrial Average passes 2000 points once again after the July figures show a trade deficit of $8.4 billion, substantially down on the previous month. The reasonably flat stock market is blamed on increased investment in zero-coupon Treasury bonds and a move away from speculative investments since last year.
US reporters claim that an aide to former Senator Howard Baker has revealed new intimate details of the Reagan White House. It is suggested that Reagan was very unwell from July 1985 until the end of his Presidency, discussions were held about the possibility for invoking the 25th Amendment to remove him, and that aides were signing Reagan’s initials on official documents due to his incapacity. President Bush insists that “there is not one iota of truth in the entire report”.
In the first presidential debate in the United States, media analysts state that President George Bush has won the battle, scoring his biggest points in his argument that Cuomo’s planned defence cuts will create major employment holes. He also attacks the economic record of the New York Governor strongly. Cuomo, trying to undo perception of him as being soft on defence and “dovish”, pledges to retain the stealth bomber and the Trident II missile system, but is perceived as spending most of the time on the defensive. Commentators state that, while the President is running a single coherent message and providing compelling visuals for the evening news each night, Cuomo appears to be too ad hoc, being very general and nonspecific at time, while at other times overwhelming his audiences with the detail in his responses. Cuomo remains slightly ahead in polling but White House insiders say the debate was the moment that the President needed. The two most memorable lines are when Bush states that Cuomo has “all the clarity of New York Harbour” and Cuomo states that Bush wants to “condone, not condemn, the heartlessness and corruption” of his predecessor.
The US House of Representatives passes legislation which requires gun dealers to wait for seven days before completing a gun sale, thereby giving police an opportunity to determine the criminal and mental state of the purchaser. It is called the Brady Bill in reference to Sarah Brady, wife of the former White House Press Secretary James Brady. Given the level of antagonism that the gun lobby feel for Governor Mario Cuomo, the President feels safe in citing that such a provision has worked well for California. He states that he will not veto any bill by the Congress, but believes that gun laws are best managed at a state level. He is amazed to win the support of Rep. Henry Hyde (R-IL), who goes further and states that guns are a “national problem”.
US Treasury Secretary Nicholas Brady states that there is a vital need for US business to increase its spending on expanding industrial capacity to meet rising economic demand and place further downward pressure on the trade deficit. US factories, mines and utilities are operating at their highest capacity in decades and Brady hints that the government expenditure will need to increase in the coming year to ensure sufficient infrastructure capacity to prevent inflation from breaking out.
US Defense Secretary Dick Cheney and Attorney General D. Lowell Jensen stage a press conference to announce that innovation in the production of the Grumman E-2C Hawkeye has reduced the cost of each unit by $17 million. While it remains unclear exactly how much will be saved overall, the action typifies Cheney’s clear concern with reducing the military budget while systematically improving American military performance.
US Treasury Secretary Nicholas Brady gives an almost-too-honest interview to express the view that the ongoing priority of the next Administration must be to reduce the deficit and that tighter fiscal policy would encourage the Federal Reserve toward a looser monetary policy. He admits that it is likely that, whoever wins the White House, they will need to increase taxes on high income earners and claims that Governor Mario Cuomo’s “war on tax cheats” will be lucky to raise a cent more than it spends. “The numbers just don’t add up,” he states. He states that he will push for cuts in farm programs, Social Security and “our subsidy to Europeans and Japanese for their defense costs”. He also will be pushing for a one-cent increase in the gasoline tax and a tax on capital gains accrued at death, “a $5 billion loophole”. He projects that the federal budget deficit, under his management, will average less than $100 billion per year over the next four years.
A leak from the US House Intelligence Committee appears in the New York Times, claiming that the CIA is funding anti-government protests in Nicaragua, apparently without White House knowledge. Their ambition is to make President Daniel Ortega appears sufficiently unpopular that, during any future election, Ortega supporters will believe he is headed for defeat anyway and not participate in voting. House Speaker Tom Foley asks whether the President should have been aware and questions, “Is the President or the CIA Director in charge of this Administration’s policy?”
The first polls since the presidential debate shows President George Bush has moved ahead of Governor Mario Cuomo by a convincing margin among the populace, but is still maintaining only a narrow lead among likely voters. Bush has locked in 218 electoral votes, while Cuomo is starting to lose states which had previously been solidly in his favour. However, polls for the Congress are headed in the opposite direction, with suggestions that the Democrats will increase their numbers in the Congress.
Vice President John Heinz and Senator Al Gore of Tennessee stage their own debate, with Heinz focusing on the expansion of the economy and jobs, space research and the elderly. Gore focuses on the banking problems, inner-city crime and the environment. At the end of the night, both men are regarded as competent and some comment on the potential for the two men to repeat the episode at a future date, with both of them as Presidential candidates.
In order to resolve gridlock, Los Angeles Mayor Tom Bradley announces that heavy trucks will be banned from the city’s clogged traffic arteries during the morning and evening “rush hours”. Businesses complain that the action will extend the working hours for anyone involved in goods distribution and require up to four additional hours per day.
Protestors in New York criticise Governor Mario Cuomo over the planned renovation and resettlement of the Niagara Falls neighbourhood of Love Canal, despite pledges of a multi-million dollar cleanup of the toxic dump. Protest leader Lois Gibbs states that Cuomo is setting a dangerous precedent on how he will deal with environmental issues as President.
US Senator Bill Bradley (NJ) states that the much-hailed resolution with the Lima Group is starting to fall apart and hints that he has news that Brazil, Argentina and Mexico are, once again, about to defect back into the camp of the radicals. Despite some $63 billion in net debt repayments by its member nations, the debt of the group has grown by $250 billion in the last three years. Treasury Secretary Nicholas Brady states that Bradley is attempting to influence the upcoming US elections by creating fear about the economy and that his debt reconstruction plan remains strong.
Independent figures confirms that the number of Americans living below the poverty line has stopped rising for the first time since 1974. President George Bush states that it is a measure of success by his Administration. Governor Mario Cuomo points out that the number of poor has risen by ten percent since the Republicans came to office in 1980, while the average income for the rich has risen by 74%. Cuomo also argues that, as the Administration cuts back on public spending to control the deficit, private debt is rising dramatically.
New polling out today puts the US President’s approval rating at 60%. Favourable ratings for the candidates are at 53% for Bush against 51% for Cuomo; unfavourable are at 37% for Bush against 33% for Cuomo. In a check of party loyalties, 85% of Republicans support Bush, while 76% of Democrats support Cuomo. Among Democrats who voted for Reagan in 1984, Bush remains even pegging with Cuomo, while among independent voters, Bush leads by 45% to 37%.
The US Congress, counting down towards the upcoming election, passes an amendment to the 1964 Civil Rights Act, so that, for the first time, it must follow non-discrimination in its employment practices.
Scandinavian Airlines buys a ten percent stake in Texas Air, owner of Eastern and Continental, creating the first global alliance among major international air carriers. Three of Continental’s gates at Newark Airport will now be badged with SAS insignia and the airlines will share ground crews, training and passenger services.
US Treasury Secretary Nicholas Baker releases federal gross debt estimates, showing that, by year’s end, the United States will be $2.3 trillion in the red. Baker insists that this compares well with Carter, when debt grew by over 9% year on year, and Reagan, who grew debt by 16%. In comparison, Bush is averaging below 6.5% debt growth. He states that the White House priority is to eliminate the budget deficit entirely, then to stimulate investment by reinstating the investment tax credit lost during the 1985 tax reform and boost research grants.
US unemployment figures show that the number has risen slightly to 5.0% (up 0.2%). Nonetheless, the figures remain very close to the 15-year low achieved. The figures also reveal that wages have actually declined by 0.9% in inflation-adjusted terms over the past year, undercutting those who are arguing that interest rates will need to rise.
US Vice President John Heinz gives a speech in which he praises the nation’s economic performance, pointing to recent achievements in reducing deficit, containing unemployment and controlling inflation. His opponent, Senator Al Gore, attacks the speech, stating that “if I could write cheques for $200 billion I didn’t have, I could make you feel prosperous too.” He raises the spectre that the Republicans will cut Social Security payments, winding back the recent payroll tax increase once the election is over.
US Vice President John Heinz makes headlines with his handling of a query over potential succession to the Oval Office, stating that, in any crisis, the country could be sure that he would follow the policies of President Bush. He draws a contrast with the Democrats, pointing out fundamental differences between Governor Mario Cuomo and Senator Al Gore, who represent different wings of the Democrats.
US Energy Secretary John Herrington is accused of covering up the recent shutdown of nuclear reactors in South Carolina and Colorado after workers are exposed to radioactive material. Rep. Mike Synar (D-OK) states that better guidelines are needed for private contractors and that a review of engineering qualifications is immediately necessary. Herrington replies that the Democrats are attempting to create an electoral controversy where none exists.
New polling released today shows that President Bush has slipped back to 201 electoral votes, while Governor Cuomo has climbed to 134 electoral votes. Ohio is shown to have solidified in the Republican camp, while Pennsylvania has now solidified in the Democrat camp. However, Texas and Illinois have now become uncertain once again, joining Michigan and California which have remained uncertain for months. States within the margin of error on polls (3%) are: California, Michigan, Maryland, Connecticut, Arkansas, West Virginia, New Mexico, Montana and North Dakota.
The Congressional review committee on Pentagon base clsoure, established with bipartisan support a few months ago, issues recommendations on the closure of two bases. The first is Fort Douglas, Utah, which was originally established in 1862 to guard stagecoaches. The second is Fort Sheridan, Illinois, which has been guarding a golf course since 1973. Over the next year, it will close down sixteen bases in total.
US First Lady Barbara Bush creates a controversy on two fronts during a television interview to promote literacy. Firstly, she suggests that the Administration should be spending more on education and that both sides of the political divide need to “lift their game”. Secondly, she argues that the candidates should not debate abortion, claiming it is a “personal issue, not a political issue”.
F W Woolworth outlets begin to carry the Uzi semiautomatic machine gun for $600. Police organisations around the country call the action “outrageous and reckless”, but a Woolworth spokesperson states that it is a legitimate aspiration and talking point among friends.
The US trade deficit for August comes in at $10.8 billion, a surprising rebound from the previous month. It quickly leads to a rebound in the value of the yen, with the dollar slipping to 114 yen. The plunging dollar reflects a belief among traders that US consumers need to decrease their dependence upon exports.
In the largest operation of its type, the US Justice Department and its British counterpart arrest over fifty executives of the Luxembourg-based Bank of Credit and Commerce International (BCCI). The seventh largest bank in the world, BCCI is reported to have been involved with the Medellin drug cartel, as well as money laundering and arms trafficking. Former US Defense Secretary to Lyndon Johnson, Clark Clifford, is named as a person of interest in the investigation.
New statistics on US homelessness show that total numbers have fallen from 736,000 in April to 714,000 today. Housing and Urban Development Secretary Samuel Pierce calls for increased budgetary support. He points to efficiencies in his own department which have reduced the cost of housing per unit and projects that low cost housing could be increased back to 1980 levels within four years at a cost of a further $13 billion (a saving of roughly $15 billion). He also suggests the tax subsidisation of 40-year mortgages must be retained.
The second US Presidential debate occurs in Los Angeles, with George Bush seen as triumphing because of his congeniality. Appearing relaxed and confident, he accuses Governor Mario Cuomo of trying to be “aggressive and warm, all at once”. With the election just a fortnight away, it appears as though Cuomo has lost his last chance to turn around the prediction of a Bush win. Cuomo admits afterwards that he needs to communicate “a compelling rationale” for his candidacy.
Speculation begins to centre on the US Senate races. With 58 Democrats, they need to pick up only two seats in order to establish the so-called “super majority”. It appears almost certain that the Democrats will pick up Nebraska and Virginia but are very likely to lose Mississippi. Of most concern to the Republicans is that Rep. Connie Mack is trailing in Florida’s Senate race.
A massive nationwide television campaign begins for Mario Cuomo, portraying his speeches from the 1984 and 1988 national conventions, both of which have been highly rated. US President George Bush is now ahead by four to seven points on the national vote and it is becoming clear that Governor Cuomo must win twelve of the sixteen uncertain states in order to gain the necessary electoral votes to overcome the Republican advantage. It is suggested by one national journal that Cuomo needs a serious Bush stumble, scandal or stock market crash.
US President George Bush defends recent comments by the First Lady. “I do not tell my wife what she can and cannot say. She has always been a woman who speaks her heart,” he says. He suggests that attempting to use her comments to influence the campaign is a “cheap political shot by our Democrat opponents”.
US President George Bush signs legislation converting the Veterans Administration into a Cabinet-level department. It operates the largest health care delivery system in the country and employs more than any other government body, save the Pentagon, and will come into effect with the swearing in of the new Administration next year.
Governor James Thompson of Illinois confirms that the current corn harvest, already devastated by drought, has high levels of aflatoxin, a naturally occurring but highly toxic fungus. It means that about a third of the crops cannot be used for anything other than feedlot for beef cattle. It is soon confirmed that similar situations exist across nine states.
Jesse Jackson is accused by Cuomo aides of having sabotaged the campaign, despite having spent every day of the last eight weeks on the trail trying to motivate his support base behind the candidate. Nonetheless, polls indicate that large numbers of African Americans are intending to stay away, and that their support for Bush is double that of Reagan four years earlier. They also indicate that Reagan Democrats have fallen away from Cuomo because he has been seen to be too close to Jackson.
US President George Bush admits concern over the growing cost of health care, stating that no action on Medicare will expand the budget deficit by $64 billion in the coming presidential term and that costs are rising twice as fast as inflation. He states that a necessary first step must be to end “the taxpayer subsidy for smokers”. He confirms that he will double the federal excise on cigarettes from 16 cents per packet to 33 cents per packet, and plough the additional $5 billion per annum directly back into Medicare. He also argues that it is cheaper than Cuomo’s “socialist” expansion of health care, which will “place the burden on employers and destroy jobs”. He further implies that opposing an excise increase is an attack on the health and welfare of children.
RJR Nabisco proposes a leveraged buyout by the management of the food and tobacco conglomerate valued at $17.6 billion, making it the largest takeover in US history and eclipsing the Chevron acquisition of Gulf Oil in 1984 ($13.4 billion). The same day, Philip Morris offers $11.5 billion to buy Kraft. The two deals indicate that there may be a returned confidence to the market and an emergent outbreak of merger mania. The merchant banks state that the weak dollar has made US assets bargains and point to Sony’s takeover of CBS and Bridgestone’s purchase of Firestone as examples.
The most popular Halloween card for the year has a newspaper mock-up on the cover with the headline reading “BUSH WINS”. Inside, it reads, “This is the scariest card I could find. Happy Halloween”.
Democratic candidate Mario Cuomo appears in an advertisement, criticising the President as the “man from Easy Street” who has sold out to foreign trade interests. The populist appeal quickly begins to make inroads into the solid Republican lead.
Only days before the election in the United States, Governor George Deukmejian endorses Proposition 102, a vote to force all carriers of HIV to be reported by their doctors. UCA Berkley groups strongly condemn Deukmejian for a “failure in public policy” and “extremist politics” and the ballot goes down on Election Day by 70% to 30%. In Maryland, voters will also reject a referendum to abolish new restrictions on the manufacture and sale of handguns to those with a “socially useful purpose”. The National Rifle Association state after losing that they will “fight all the way” to the Supreme Court for the protection of 2nd Amendment rights.
Detailed polling shows that, while the Democrats enjoy a six point lead in questions regarding congressional voting intention, President Bush retains at least a seven percent lead over Governor Mario Cuomo. On questions regarding better economic management, Bush leads Cuomo by a massive 16%. Among the Reagan Democrats, Bush’s lead has now opened to fourteen points. However, some elements of the electorate still clearly desire a different leader, with 46% of Republicans stating they wish for a more conservative leader and 64% of Democrats stating they disagree with Governor Cuomo.
Wealthy Texan businessman, Ross Perot, declares that both political candidates are “little men”. He states that the President has campaigned on “pseudo-issues” while the Governor “can’t tell us why we should vote for him”. He further argues that “they read words off Teleprompters and lie to us in their ads, and then try to tell us to trust them”. The words strike a chord with Americans.
Governor Mario Cuomo gives an interview to ABC Nightline’s Ted Koppel. He tells the American people that he “upholds the liberal values of tolerance and a deep concern for the civil liberties of the American people being eroded in a global age”. He expresses “an abiding belief that activist government can be a force for good” and said the new Democratic Party was a “marriage of traditional and long-range goals”. He defends his role in New York as “a capable administrator who fostered creativity but transcended traditional Democrat beliefs about the business community”. He admits his willingness to raise taxes or “security transfer fees”, but “only as part of a more responsive tax package” which will be “negotiated with the Congress I’m given by the American people”. He states that he offers “no grand vision, just ambitious proposals” like his “US Study Bank” proposal of interest-free loans and accounts for students, with the government only minimal charging fees for its service as a processing agent. He calls a Bush victory “a return to Establishment control”.
The Southern Poverty Law Centre continues its campaign against the Ku Klux Klan, today obtaining an order for $950,000 for the Klan’s attempt to prevent a march on Martin Luther King Day in Georgia. The national organisation, which recently lost their headquarters in a similar law suit, is told that their chapters and members are jointly and severally liable for any costs.
President George Bush follows the Nightline interview of Governor Cuomo, with one of his own. He states that he will “continue to govern as a mainstream Republican”. He denies that he has, at times, “skirted the boundaries of truth” and become “a voicebox for the speechwriters”. He charges that Cuomo is “far outside the American mainstream” and hints that the Governor would want to move the USA towards European-style socialism. He charges his Administration thus far has been one of “technical competence, team cooperation, concensus and smooth organisation” and of a “kindler, gentler nation”. He refuses any offer to cancel his education and day care programs, stating that they stem from “a personal conviction”. He likewise refuses to rule out new taxes to prevent inflation, but states that “they should not be increased just to balance budgets. Taxes distort the economy and must be kept at a reasonable level, but the most important factor is that they don’t limit growth”. In question to the future composition of the Supreme Court, he states that he is looking for a “more representative court”.
US President George Bush outlines his plan to double the nation’s output of hydroelectric power by 2050. Stating that it is necessary to build capacity to contain prices, he offers $250,000 per plant for the construction of dams across the country.
The US Commerce Department issues GDP figures for the third quarter. They show that GDP has grown at an annual rate of 2.5%, the weakest result in eighteen months. Economists agree that there is no cause for concern as growth is still reasonable and that it appears the overheated economy may be coming in for a soft landing.
US Treasury Secretary Nicholas Baker, who is tipped to be the new White House Chief of Staff if Bush is returned, states that the Congress needs to change legislation to allow governments to take over settlement of mortgages when the value of the house has fallen below the value of the mortgage. He states that the Federal Savings and Loan Insurance Corporation should be merged into the Federal Deposit Insurance Corporation and that banks should pay the government a greater share of insurance costs if they are going to be reckless. He estimates that failure to do so would eventually cost the American taxpayer another $100 billion to fix the problem.
A new medical report published in the United States recommends that caesarean section should only be used in childbirth if vaginal delivery poses a risk to mother or child. It points to Soviet studies which show that children born by c-section have a 20% increased incidence in diabetes and rate of risk increased substantially before 39 weeks.
President George W. Bush is returned to the Oval Office for a third Republican term. The President wins 289 votes, while Governor Mario Cuomo wins 249 votes. At night’s end, both Maryland and California were uncertain, but the incumbent had already won enough electors to secure election by the end of the night. Both states later went to the Democrats. In percentage terms, Bush takes 48.3% of the vote while Cuomo takes 49.4% of the vote. While Bush ran a strong campaign, this narrow margin was converted into the following results:
The House of Representatives: 265 Democrats, 169 Representatives, 1 Independent.
The Senate: 61 Democrats, 39 Republicans
The Governors: 35 Democrats, 15 Republicans
In the closest Senate races, the Democrats slide through. In Florida, the open election sees Buddy McKay beat Connie Mack. Mike Lowry became the new Senator from Washington. In Montana, John Melcher receives a serious scare, but survives. In Wyoming, John Vinich manages to oust Governor Malcolm Wallop from his position. The most notable loss in the House is Fernard St Germain of Rhode Island, who loses his seat and his position as chairman of the House Banking Committee.
FBI Director William Sessions appoints an investigation into racist intimidation of Hispanic employees by both Texan and California officials of the agency. While the issue has been brewing since September, Sessions denies that he suppressed information about the issue in the lead-up to the election.
John Mitchell, the director of Nixon’s re-election campaign in 1972, passes away after a heart attack in Georgetown. The former Attorney General will be buried in Arlington National Cemetery with full military honours.
There are many public calls for an overhaul of the US presidential debate process by the League of Women Voters, who claim that the threshold of 15% of the opinion polls is too excessive to be truly democratic. They recommend a target of five percent and state they may be prepared to resume sponsorship of the debates if certain commitments are made by the US Commission on Presidential Debates. They want three debates between the candidates, one between the vice presidential candidates as a minimum. They point out that the five percent more accurately reflect legislative guidelines for funding and is backed by former Presidential candidate, John Anderson.
A computer virus brings down the Pentgon’s ARPANET and MILNET, after it races through the Lawrence Livermore National Laboratory, the National Computer Security Centre, the Jet Propulsion Laboratory, Ames Research Centre and Goddard Space Flight Centre. No data appears lost and no files destroyed, but it appears as though sensitive government information has been accessed. The virus is traced to quickly to a computer in the National Security Agency which was officially not in use at the time.
The number of video cassette recorders in the United States passes 50 million.
Former Filipino First Lady Imelda Marcos arrives in a Manhattan court to face fraud charges. District Attorney Rudolph Guiliani admits that the Marcoses had an asylum agreement, but there was “no agreement that Marcos could be just as big a crook in this country as he was in the Philippines. He needed to be a good boy here, and he wasn’t a good boy.” President George Bush has refused to personally intervene in the case.
US President George Bush announces that he will appoint a House Committee to investigate potential changes to the electoral process, including changes to the presidential debate system. He also warns House members not to “clog” the budget with excessive spending, stating that, if they exercise caution, the United States could enter 1990 with a lower public debt than in 1989. He also projects that public debt could halve over this term if economic growth remains stable throughout. He insists that his recent election victory means the Congress need to endorse his tax plan.
Sears Roebuck announces that Sears Tower in Chicago is up for sale to enable it to buy back 10% of its outstanding shares. Sears is attempting to reduce its vulnerability to corporate raiders and is willing to give up the landmark building, the tallest in the world.
Hints emerge that the White House and the US Congress have made a deal on lowering capital gains tax on non-real estate assets to 20%. The President continues to sell his tax increases, stating that, to be truly overwhelmed by the new taxes, one would need to be “a retired chain smoker earning in excess of $100,000 per year and driving thousands of miles each month”.
The US dollar begins to climb, as traders become increasingly convinced that the US budget deficit for the coming year will be at least $20 billion lower than last year. While the President’s plan asks for a $96 billion deficit, there are predictions that range from $100 to $120 billion, which nonetheless both represent a significant fall from the previous year.
New York Governor Mario Cuomo admits that, despite winning a majority of votes, the Democrats need to “cease the pretense that we are the nation’s natural governing party”. He notes deep-seated prejudice by some against the party and expects that the next four years will see a battle between the various factions of the party to establish its future direction. He admits that he relied too much on Republican “self-destruction” and believed that the election was lost by late September.
US President George Bush states that he has received “a mandate to make some tough choices necessary to rescue this country from a mountain of debt”. He also admits that the Republican Party needs to reach out more to female voters, noting that he achieved only 43% among them despite overwhelming support among male voters. He expresses disappointment at the poor numbers in the Congress, stating that it appears as though the cohort of the Reagan Revolution are gone and that the Republican Party must look towards a new agenda. He also admits that negotiation with the new Congress will be “particularly difficult”.
Rev Jesse Jackson states that he is likely to seek the Democratic Party nomination again in four years time. Others already being mentioned are former VP candidate, Senator Al Gore, and Congressman Richard Gephardt, whose campaign had come apart early in the piece. Governor Michael Dukakis also refuses to rule out having another attempt, but admits that he has to face a contest in Massachusetts prior to this.
US President George Bush confirms that Secretary of State James Baker and Secretary of the Treasury Nicholas Baker will be retained in their current positions, but that deputy budget director Richard Darman will be promoted to the top job. Craig Fuller would be retained as Chief of Staff. He states that he will continue to confirm Administration positions in the coming weeks.
Citing reports by the Federal Communications Commission, US President George Bush states that he will sign legislation limiting the time spent on commercials on television. It makes 12 minutes per hour the new limit for weekdays and 11 minutes for weekends, which are above the current commercial limit of 80% of television stations, but the legislation is designed to curtail the more serious abuses in which children are bombarded in the late afternoons.
The US Senate elects a new Majority Leader to replace Senator Robert Byrd. Senator Daniel Inouye is a second-generation Japanese American and winner of the Purple Heart for his World War II service. In charge of a Senate with the largest Democrat majority since 1977, he states that he will ensure that President George Bush “keeps all his promises”. He predicts that the first great challenge to face the new Senate will be ensuring the deficit is contained.
US President George Bush announces that his Administration will undertake construction of a particle accelerator in Texas, at a cost of $5.9 billion. He also predicts that it will be completed by 1999, a year before the Soviets are expected to complete their project, giving the United States the opportunity to make the first opportunity to make advances in particle physics.
US President George Bush announces that he will appoint John Sununu, Governor of New Hampshire, as his new Secretary of Commerce. Sununu, a staunch conservative, is a trained engineer and a strong supporter of nuclear power. His appointment is immediately criticised by supporters of Israel, who point out that, in 1986, Sununu refused to condemn a UN resolution equating Zionism with racism. Bush also confirms that Dick Cheney will remain as Secretary of Defence.
Chairman of the US Federal Reserve, Walter Wriston, gives a clear indication that he believes the discount rate will remain at or below 6% for the coming year. He also states that the Federal Fund rate will peak during 1989, but will settle at 7% by the end of the year. He praises the Administration’s effort at debt control, and states that, long-term, the United States is looking at interest rates far below historical averages. The declaration places pressure back down on the dollar.
A coalition of US consumer groups, led by advocate Ralph Nader, call for the modification of the McCarran-Ferguson Act to end the anti-trust exemption. This is a response to skyrocketing insurance premiums. After the insurance companies claim that they cannot afford to continue to make healthy profits without the regulation, Nader points out that they just spent $105 million alone in an attempt to defeat a proposition they disliked in California and that premiums have risen 27% in two years.
Brent Scowcroft is appointed as the new National Security Advisor, with General Colin Powell moving into the position of Commander in Chief of Forces Command, the largest Army command. Powell is also given his fourth star in recognition of his service as NSA chief.
Criminal charges are laid against junk bond king, Michael Milken, as he meets with investment bankers to help fund the Nabisco leveraged buyout. Milken states he will “vigourously defend” his position with all of the financial muscle at his bidding.
US President George Bush announces the appointment of Lauro Cavazos, the President of Texas Technical University, as the new Secretary of Education after nearly eight weeks with no head of the department. He will be the first Hispanic to serve in the US Cabinet and is tasked with overseeing Bush’s broad and high-spending educational reforms.
The Catholic dioceses of San Francisco, Sacramento, Detroit, Milwaukee, Portland and San Antonio make a decision to politely ignore a new papal directive that orders them to withdraw support for Dignity, the Catholic gay and lesbian organisation. While they are no longer permitted to allow Dignity to meet in the churches, the bishops decide to allow priests to conduct masses outside the church, often using school buildings and open space on church property.
The US Congress finalises the budget for the coming year, bringing in a deficit of $112.3 billion. The package includes the promised housing, education and child care package promised by President George Bush in the lead-up to the election, but the President claims that most of the increase from his original $95.6 billion deficit is the result of lack of discipline by the Democrats in the House.
Governor Richard Celeste (D) of Ohio praises the decision by the Bush Administration to include $50 million in budget negotiations for the clean-up of atomic fuel dumped in an unlicensed landfill between 1955 and 1985. He states that the White House “appears to be considering a new national environmental model” and expresses hope that further state-federal cooperation may be possible on “tough cases we’re wrestling with”.
Police officials across the US confirm that they are experiencing a substantial rise in murders relating to the drug trade. The continued rise in the price of cocaine has made the market incredibly competitive, and lucrative. In New York, homicides are up by 8% this year, while in Houston and Washington D.C., the numbers are up by 34% and 55% respectively.
The US Supreme Court considers a Missouri law which requires all laws to recognise the equal rights of unborn children, prohibits doctors from aborting a viable fetus and prohibits the use of state employees, facilities or funds to procure an abortion except where the life of a mother is in danger. The Court rules 5-4 that the state can deny state aid for non-therapeutic abortions, but, as the viability of a fetus can only be established by testing and Missouri cannot force its citizens to be tested, the prohibition on doctors is not consistent with Roe v Wade.
A Gallup poll shows that 37% of voters were unhappy with the choice of candidates during last month’s Presidential election and four in ten indicate they wish they had a “third choice”. Nevertheless, it is noted that not many of them actually availed themselves of the Libertarian or New Alliance options, and thousands of voters actually scrawled in “None of the above”.
It is confirmed that $441 million will be spent over eight years to renovate the White House in preparation for the 200th birthday of the original building in October, 1992. Also included will be Blair House, the Executive Offices, two new Air Force One 747 and two new “Whitehawk” helicopters (Marine One). As usual, there are questions as to why this was only raised for discussion after the election.
US Defense Secretary Dick Cheney states that he will approve the construction of twenty-three B-2 Spirit stealth bombers, less than the 100+ requested by the Pentagon but more than Congress appeared initially willing to consider, and that the first tests will take place in March. The announcement occurs at the Groton shipyard, where Cheney is present to see the hull of the Seawolf submarine laid down. Cheney states that the vessel will be launched and testing by late 1993, before the Soviets can even commence construction on their purported Borei class submarines, but that this is because the Pentagon has made “prudent cuts” under his management and can now afford to move forward other projects.
No longer desperately needing farmer votes for the next four years, US President George Bush announces that he will undertake a major review of farm subsidies. He states they were originally introduced to “maintain the great traditions of the American farmer”, but that they may, in fact, be driving the small farmer out of business due to the capital-intensive nature of the business and the high capital gain from land sales. He pledges negotiations with the Europeans to phase down subsidies so that no farmer on either side of the Atlantic can receive more than $1 million and no farmer earning more than $1 million in profits will quality for subsidies. He estimates that this will save $6.9 billion from the budget if implemented for 1990 (and more for each successive year thereafter).
US President George Bush announces the nomination of Frank Keating of Oklahoma for the position of United States Attorney General. Keating has been serving as Assistant Secretary of the Treasury since 1984, with major responsibility for law enforcement, and is being promoted after striking up a strong partnership with Nicholas Brady.
In a television interview, Senate Majority Leader Daniel Inouye that he is confident of forming strong coalitions over the next two years and is unwilling to let Congress be “a fall guy” for any attempts by the President to extricate himself from his campaign promises. However, he expresses hope of working cooperatively with the President, because “our national problems are serious, our national challenges are great”.
For the first time in its history, AT&T announces an annual loss: $1.7 billion. The company directors state that, given the global move towards high-capacity fibre-optic cable, they are taking a one-off hit to the bottom line to cover the cost of writing off and replacing their outdated analog systems. Cost to the company in total will exceed $8.3 billion, but will temporarily create up to 16,000 new jobs, and ensure their dominance of the long-distance market (currently about 73%).
For the second time in as many months, a computer virus gains unauthorised access to Pentagon systems through the ARPANET network. This time, the attack came through a Massachusetts-based defence contractor, but Defense Secretary Dick Cheney insists that no damage was done to information and only non-classified materials were accessed.
Governor Mario Cuomo of New York criticises the treatment of Rev. Jesse Jackson during the Democrat primaries, stating that he was given a “double standard – too much dignity and too little scrutiny”. He warns that the Democrats face credibility problems when it comes to delivering a presidential candidate because the black base votes for Jackson without policy consideration, and the white base refuse to vote for him irregardless of policy consideration. Internally, he suggests a trade-off in which Jackson’s campaign manager, Ron Brown, will become the new party chairman in return for Jackson agreeing to stop contesting the primaries.
Congressman Jack Kemp confirms that he will serve as the Secretary for Housing and Urban Development in the Bush Administration, replacing Samuel Pierce. He states that the subsidisation of new housing construction will continue and that, to finance ongoing expansion, tenants will be allowed to buy new public houses. In addition, he suggests the creation of tenant management cooperatives, what he describes as “a synthesis of New Deal programs and conservative thinking”.
US unemployment for November remains steady at 5.0%, with only a small shift upwards from the previous month, while the economy continued to grow at a modest 2.6%. Federal Reserve Chairman Walter Wriston again urges caution and calls on the Administration to continue its efforts at reducing the deficit, arguing that failure would “risk a serious financial disturbance”. Treasury Secretary Nicholas Brady states that the Fed must not attempt to “contain inflation before it even appears”.
Further new appointments are confirmed for the Bush Administration. Carla Hills, a former member of the Ford Administration, is tapped as the new Secretary of Labor, while Barbara Franklin will move from the Commerce Department to chair the Council of Economic Advisors. William Webster will remain head of the CIA. Thomas Pickering is selected as UN Ambassador.
It is confirmed that Long Island Lighting, the former owners of the troubled Shoreham nuclear power plant, have gone into bankruptcy and their former President has been fined for lying to New York state officials. Governor Mario Cuomo confirms that the company faces a $4 billion class action lawsuit from nearly one million customers and offers to establish a public authority to buy out the assets of the company.
US political activist Lyndon LaRouche is sentenced to fifteen years in prison for fraud and tax evasion. The issues surrounding LaRouche, often controversial, will continue to drag through the courts well into the 1990’s.
It is confirmed that AT&T has won the US federal government contract to replace the entire long-distance telephone system with a modern fibre-optic system, similar to what they had already planned for their dedicated lines. The value of the contract is $25 billion. AT&T agrees to onsell parts of the contract to Sprint in return for a 30% share of the company’s stocks.
US President George Bush promotes his new housing plan in New York and suggests that welfare recipients who want to be guaranteed a place in the new housing will be forced to surrender 30% of their welfare payments on an ongoing basis. He argues that “there is nothing free in this world”, but homelessness advocates label him as “callous” for the proposed new conditions on welfare.
US regulators refuse to recognise a new financial product, unbundled stock units, stating that it is too difficult to determine a fair value for the items due to their complexity. It particularly upsets four companies who had planned to use the product to deter corporate raiders: American Express, Dow Chemicals, Pfizer and Sara Lee.
US President George Bush confirms that, as part of his education program, US companies will be able to apply for subisidies to cover the cost of literacy and numeracy programs. As an example, he cites General Motors as the largest possible beneficiary, who already has such a program and will now be able to claim $24 million each year towards its operation.
US Senator Jesse Helms (R-NC) claims that it is time for the White House to review and wind back sanctions on South Africa. He points to violence against civilians in the Zimbabwean Civil War next door and suggests that, if any sanctions should be applied, they should fall on Harare’s “racist regime”.
An Atlanta medical school chief, Dr Louis Sullivan, is named as the new Health and Human Services Secretary to the Bush Administration. Sullivan hopes to abolish the cost to business for health insurance by making all plans individual-based, rather than company-based, and portable between companies. On the same day, Richard Bond is named as White House Deputy Chief of Staff and Ann McLaughlin is named Secretary of Agriculture. There is ongoing debate about the Transport Secretary position.
US President George Bush addresses the increase in funding for Head Start in the new budget, stating that the program has been extended for homeless children and to provide immunisation injections to children whose parents are unable to afford them. He also points out the graduate program, which allows high standard teachers to pay off their loans faster by working in selected public school districts, and interest rate subsidies, made to schools investing in infrastructure upgrades. He defends the child tax credit as a necessary part of the education program, rejecting claims he made an “electoral bribe”.
US President George Bush defends a $14,000 pay increase for Members of Congress in order as part of a deal which will allow him to abolish honorariums over the coming year. He states that the cost of campaigns has meant that members of Congress must now spend their time giving paid speeches at luxury resorts, rather than working with their constituents. He argues that preventing members of Congress from taking money for speeches will be an important first step in campaign finance reform.
According to industry sources, long play records made up only 6% of US sales last year. It is widely reported that Warner Bros and EMI are already discussed ending manufacturing of LP’s and focusing exclusively on compact discs, which now make up 38% of the US market and 54% of the Japanese market, and cassettes.
The US Centre for National Health Statistics reports on a disturbing trend of a declining life expectancy among African Americans. Primarily, it relates to the murders of African American males, which have peaked at just above 50 per year for every 100,000. There are suggestions that the drug trade is the primary cause.
Rockwell International admits to safety failures at their Rocky Flats nuclear reactor in Colorado after a two-year EPA and FBI investigation. The long-term costs of the court cases and clean up will be part of the terminal decline of the Rockwell conglomerate, eventually amassing to $395 million (part of which will be settled by Dow Chemicals).
Rev Jesse Jackson declares that citizens of his race should henceforth be known as African Americans. The term quickly comes into vogue, replacing the “black” identity prevalent since the late 1960’s.
MCA Records chief Irving Azoff announces a plan to merge with Ticketmaster, in which Ticketmaster would become the new parent company and Azoff retaining control of the merged conglomerate. Rumours will later circulate about mob financing in the deal, but no investigation is ever undertaken.
White House sources confirm that Elizabeth Dole, the wife of the Senate Minority Leader, is to be re-appointed to the position of Secretary of Transport after an absence created by her husband’s political campaign. The first Secretary of Veterans Affairs is General John Wickham Jnr., the retired Chief of the Army. However, the major political story in Washington is the statement by Dr Louis Sullivan, the new nominee for Health Secretary, who states that he supports a woman’s right to an abortion. Bush steps in to defend Sullivan from outraged Republican Senator, Orrin Hatch.
US President George Bush states that his country needs to take firm action in light of recent discussion on the environment. He warns that the tax on gasoline may rise further from the current 29c (a gallon at the pump is currently selling for $1.15), but thinks this is unlikely before 1991. He also states that he will negotiate with the automakers to get new fuel efficiencies. (He will eventually compromise on his own targets and settle on 45 miles per gallon by the year 2000 rather than 50 miles per gallon in 1998.) He pledges to implement recycling programs in all federal agencies from 1990. He also pledges to streamline the process for any power generator wishing to convert from coal to gas. He calls for a Paris summit to be held in June next year for world leaders to convene and discuss the environment, from which he suggests may emerge an amendment to the Law of the Sea treaty.
General Motors’ internal auditors bust a car sales businessman running a Ponzi scheme through their financing arm, GMAC. While the scheme wound up, GMAC is burdened with costs of $250 million. The company decides to more tightly regulate its car finance and will limit loans to four years rather than the current five years.
Oil company Mobil announces they have developed a chemical process to recycle polystyrene foam, one of the major forms of containment for CFCs. Its first plant for the process has opened in Massachusetts, where, in its first year, it will destroy 8% of the state’s supply of CFCs and turn them into pressed plastic resin products.
The Governor of Louisiana, Buddy Roemer (D), is one of a number of US state executives calling for the protection of federal defence funding for his state. He warns that there have already been too many cuts to the armed forces and insists that the troops can be put to other purposes, such as upgrading Louisiana’s levee system.
The US Department of Treasury expresses the expectation that the continued roll-out of the President’s youth package will, with housing, significantly reduce the percentage of Americans living below the poverty line. He has projected that, over the next two years, the number of Americans living in poverty will fall from 13.2% to 11.2%.
A CNN program speculates on the year ahead for the US national economy, now in its longest boom in post-war history. Guests from Tokyo, Berlin and the US predict that, on current trends, the economy will continue to grow, with the general concensus emerging at a 1.8% growth rate, but then the recovering small farm sector may push this up to 0.8% higher. There is also agreement that inflation pressures are moderating, but will remain at, or about, 3.9% to 4.4% due to ongoing effects of capacity restraint. November joblessness has just come in at 4.9% and will rise to 5.1% over the next twelve months. It is predicted that the federal funds rate will remain stable, but the next move is likely to be down. For this reason, the dollar-yen exchange will also probably remain stable. The US trade deficit for 1988 was $99 billion and it is predicted that 1989 will see trade $83 billion in deficit. Federal budget for fiscal year 1990, whose budget will be introduced next week, is projected to have a deficit of $85 billion. The Savings & Loan cleanup is almost over, the Farmers Home Administration shortfall is down from $36 billion to $28 billion and concerns about energy shortfall have been addressed by $100 billion in new spending. Business investment is up 9% on last year.
Washington DC Mayor Marion Barry is linked to a high level cocaine dealer and reports are leaked of an investigation into the Mayor by a federal grand jury over misuse of funds. He claims a devious “white” plan to regain political control of the District.
Massachusetts Governor Michael Dukakis and California Governor George Deukmejian coincidentally choose the same day to announce their intentions not to seek re-election in 1990. Dukakis is said to still be stinging over his Democratic primary defeat and refused to rule out a run for the Presidency in 1992.
Former US President Jimmy Carter throws his support behind the White House campaign to reduce homelessness. He suggests that it is not the only issue facing the country, with nearly eight million people living in housing which is substandard (no heat, no plumbing). With fellow Habitat for Humanity partners, Bob Hope, Paul Newman and Amy Grant, he proposes the creation of no-interest mortgages for owner occupied housing, based on a $2500 deposit, with the government having the right of first refusal on any future purchase. He insists that the Administration should “multitask” on the housing front rather than relying on a single initiative.
Senate Majority Leader Daniel Inouye and House Budget Committee Chairman Leon Panetta call on President Bush to address Medicare problems. They congratulate him on his reform of farm subsidies and Social Security, but suggest his position on health is “vague at best”. White House Chief of Staff Craig Fuller states the President is looking at “broad proposals”, but has “no intention at showing his hand yet”.
The wife of the US Vice President, Teresa Heinz, gives a speech at Boston University on environmental policy in which she is perceived as being directly critical of the record of the Bush Administration on the issue. Her son, John Heinz IV, is in his graduate year and her husband had been meant to speak, but had been unable to attend due to budget talks.
A Miami police officer shoots and kills a man who is fleeing police on a motorcycle. His passenger is killed in the resultant crash. Rioting erupts in minority neighbourhoods and drags on for three days before law enforcement officials are forced to use gas to disperse the crowds. By the time order is restored, two people have been killed and over forty injured. Property damage is estimated at nearly $2 million.
A disturbed drifter with a long criminal history, Patrick Purdy, is shot dead at an elementary school in Stockton, California after being cornered by police on the grounds. He is killed after refusing to hand over his weapon.
US First Lady Barbara Bush staunchly defends Teresa Heinz during a visit to a cancer clinic, reminding the media that they have forgotten “key details” in their code of conduct and should stop pretending to be nice. The First Lady is well respected in the country and is believed to be the energising force between the President’s liberal line on education and AIDS funding.
Famous US prosecutor, Rudolph Giuliani, announces that he will step down as US District Attorney during the coming week and will throw his hat into the ring to become the Republican Party candidate for the position of Mayor of New York. Many expect him to be a formidable candidate against incumbent Ed Koch.
US President George Bush completes his Cabinet with the appointment of James Watkins, a former Admiral, as Energy Secretary. Giving an interview on the day before his Inauguration, he states he is “very aware” that no President has served two full terms since Eisenhower and that, in 1992, he will have been President for nearly six years. He expresses great pleasure at an approval rating of 61% in recent polliing.
George Bush is inaugurated as President at the Capitol. His speech talks of a world being “refreshed and reborn by freedom”. He calls for a “generous diversity” and echoes Lincoln by calling on Americans to re-establish their connection to their “better angels”. He praises community organisations, calling them “a thousand points of light” and pledges to work with them, arguing that “depending on bureaucracy over community is the path to serfdom”. He projects a “close relationship” with the Soviets and expresses a hope of “friendly alliance” and pledges that, at the end of the term, the budget deficit “will be a memory”. He warns against “loose ethical standards and adoration of the dollar” as the greatest threat to American prosperity.
The Dow Jones Industrial Average closes at 2115.77 after a week of bullish trading. Analysts predict that the stock market will continue to recover over the coming year, but express the belief that the market will not reach the 2600 benchmark, first reached during August 1987.
Another poll on US President George Bush states that eliminating the Reagan deficit is his number one task. Voters declare confidence in the ability of Congress and the White House to cooperate but a large minority believe that economic conditions will be precarious over the next four years. A majority believe Bush is “ethical”, “a strong leader”, “a good economic manager” and “supports the middle class”. The polls also indicate that the majority are concerned about his management of relations with the Soviets.
It is confirmed that Jack Lawn will be retained as head of the US Drug Enforcement Administration, putting the kybosh on the belief that former Education Secretary Bill Bennett was headed for the job. Lawn states that he will work closely with Housing Secretary Jack Kemp in order to stop public housing being “the K Mart of drugs”.
US House Ways and Means Committee chairman, Dan Rostenkowski (D-IL), admits that resistance to the President’s gasoline tax increase by Western congressman means that it is likely that the tax will only rise to 24 cents per gallon, rather than 29 cents per gallon. He also projects that there will be a $1 billion income tax credit for low-income workers in order to compensate for the rise. He states that it is possible the Administration will have to consider a very low, broad-based federal sales tax, but admits that Congress “may not want to become bogged down in that level of complexity”. Opponents to the tax state that it will cause a 0.4% fall in GDP and a 0.6% increase in inflation.
Convicted sex offender Jeffrey Dahmer of Wisconsin is arrested and charged with four murders committed over the last decade. His trial, conducted mid-year, will be a major news story due to the gay aspect of psychopathy and he will spend the remainder of his life in a correctional facility.
US President George Bush tells reporters that his child-care tax credit may have to be delayed if he cannot get the expected revenue boost from the gasoline tax. House Majority Leader Jim Wright and Speaker Tom Foley both criticise the President, stating that he only promised child care reform in the election lead-up to balance out the Democrats and had no intention of following through.
In an interview with PBS, US President George Bush praises the economic growth of the Reagan White House, while expressing concern that it tacitly approved selfishness and glorified greed. Some of the Republican Party faithful respond aggressively, arguing that Bush is trying to move the party away from the right, and hint that the President may have to deal with a primary challenge before the next election. Bush also states during the interview that he wishes his performance over the term to be reviewed based on his success in reducing the budget deficit. He also admits that he never wanted to be Vice President.
A poll is conducted into the popularity of US Vice President John Heinz. Half of those polled had a positive impression of the VP, while up to a third state that they had no particular positive or negative impression. Most Republican opponents consider him too “progressive”. It is already generally expected that, come what may, Heinz will be a candidate for President in 1996. Given that half of the last ten Vice Presidents have moved into the Oval Office and that seven out of ten have won their parties’ nomination, American voters are finally beginning to scrutinise Heinz.
US Attorney General Frank Keating authorises an inquiry into the behaviour of his predecessor, Edwin Meese, after his department hands him a report showing that Meese had participated in decisions relating to companies in which he held stock and had tried, last year, to interfere in a fraud investigation surrounding a friend. Keating stresses that there will be no criminal charges.
November trade figures bring in a current account deficit of $9.8 billion, above average but reflective of the recent rise in the dollar’s value caused by the lower budget deficit. US Commerce Secretary John Sununu states that he does not favour the “old approach” of placing downward pressure on the dollar, arguing that it does not improve competitiveness and ultimately just “puts America up for sale”.
US Treasury Secretary Nicholas Brady calls for “restrictive wages policy”, arguing that more money needs to be directed into 401k accounts. He suggests that, in future wage negotiations, employers should only offer half of any increase in direct wage compensation and that the other half should be set aside into a retirement savings plan. He points out the success of a similar program last year, showing that US savings rates have risen to 7% this year (for the first time since 1981), and he recommends that this should continue until savings rates have reached a rate of 12-15%.
US Attorney General Frank Keating states that the Administration is thoroughly investigating potential changes to immigration laws. He hints that, as a starting measure, the White House is expanding the INS border patrol by a third (to 4,500) by the end of the year and consider a variety of physical barriers which might be constructed on the border.
Relying on a recent Supreme Court decision that only “socially useful” weapons are protected by the 2nd Amendment, Congress enacts a ban on semi-automatic weapons. Among those banned are the AK-47 copy, the MAC-10, the semi-automatic M-16 and the Uzi. The legislation also bans the importation of high capacity ammunition clips and establishes a program to distribute safety locks, free of charge, to all gun owners who request them from the police. In compensation to gun lobbyists, the waiting period for guns is reduced to three days (from the current seven). US President George Bush states that he will not veto the bill.
The Supreme Court strikes down a Virginian ordinance which guaranteed African Americans and other minorities a greater share of government contracts, stating that “an amorphous claim of past discrimination cannot justify an unyielding racial quota” and reinforcing that affirmative action can only be undertaken to compensate for “specific instances of discrimination”.
Republican Party members are enraged when it leaks that Health Secretary Howard Baker told Congressional leaders behind closer doors that he strongly believes in a women’s right to an abortion. Baker is summoned to the Oval Office for discussions. Things are further confused when Treasury Secretary Nicholas Baker is said to have proposed a 0.0025% “annual surcharge” on all bank deposits larger than $100. The idea is quickly squashed by the White House. Bush covers the day by telling reporters that his new team is still learning John Kennedy’s rule: If there is more than one person in a room, consider anything said to be on the record and a probable headline in the morning paper.
In a growing trend against guns, the Washington DC City Council votes to extend the legal doctrine of “strict liability” to firearms. This means that guns become an inherently dangerous product under the law, and that manufacturers and distributors can be held financially liable for damages caused by their use.
The US National Institute of Health announces that the first gene transplant into a human being. A marker coming from the E.coli gene has been injected into a cancer patient to see how lymphocytes (cancer-fighting cells) behave inside the body. It is declared a landmark in medical history.
The US Census Bureau reports that the population will climb to 270 million by the end of the century, and then 295 million by 2010. It indicates that tighter immigration restrictions and falls in the natural birth rate will mean that the population will peak in around 2025 at between 315 and 320 million people and will hold near that level for at least the following quarter century.
Soviet President Mikhail Gorbachev agrees to open up all Soviet files on the Cuban Missile Crisis if the White House is prepared to do so the same, so that both nations can understand what occurred. It emerges that the Soviets were convinced Cuba was about to be invaded, even though President Kennedy had refused to consider the option. It is confirmed that nuclear warheads were hours from launch and that the Soviets and Cubans were far better prepared than US intelligence had indicated, meaning any invasion would have been a bloodbath. It is also revealed that Kennedy had refused to be evacuated in the event of a nuclear attack and had instructed that Vice President Johnson should be sent to the Blue Ridge command bunker instead.
US Vice President John Heinz visits Venezuela to attend the inauguration of new President Eduardo Fernandez. He meets the leaders of Brazil, El Salvador and Nicaragua. Brazilian President Jose Sarney states that Heinz demonstrates “a deep understanding of the political realities of Latin America”.
Ohio Congressman Donald Lukens (R) is forced to resign his seat in the House of Representatives after criminal charges are laid over his affair with a 16-year-old girl. The girl claims that she has been paid for sex by Lukens for three years and the mother claims that Lukens offered her a bribe to cover up the affair.
North Carolina Senator Jesse Helms (R) is criticised by the White House for holding up the appointment of Deputy Secretary of State Lawrence Eagleburger and other State Department officers in an attempt to get one of his own lackeys appointed to the Treasury. Chief of Staff Craig Fuller is said to have warned Helms that the Republican National Committee may oppose his re-election to the Senate in 1990 if he continues to frustrate the Administration’s objectives.
A runoff primary to determine a Democrat candidate to fill a special vacancy in the Louisiana House of Representatives attracts global attention due to the candidacy of former Grand Wizard of the Ku Klux Klan, David Duke. Duke is defeated by a wide margin by the brother of a former Governor.
US President George Bush states his wish to “completely clear the deck” of the issue of the banking industry prior to his speech to Congress in two days time. He announces the Federal Savings and Loan Insurance Corporation is “exhausted” and it will be merged, together with the Federal Home Loan Bank Board, into the Federal Deposit Insurance Company. The government will take control of over 500 thrifts (out of approximately 3000) at a cost of $126 billion, spread out over a decade. $60 billion will come from a levy against the financial services industry, while $50 billion will be borrowed through the issuance of bonds, with the money repaid through the sale of thrift assets.
Responding to the Helms criticism, Senator Sam Nunn of Georgia (D) invites the President to cooperate with the Democratic Party, pointing out that the Democrats have endorsed all his nominees and kept the promise to maintain bipartisanship. He suggests that a “friendly political alliance” is possible between the Senate and the White House.
US President George Bush addresses a joint sitting of the Congress to talk about his “agenda for action”. He promises to stop off-shore drilling, extend health care for pregnant women and create new national parks. He offers Puerto Rico a referendum on statehood, outlines an expansion of Amtrak and pledges the one-off educational scholarships will be made permanent. He also announces that long-term capital gains tax will be cut from 33% to 20% and new business exemptions valued at $2.7 billion from next year. The child care tax credits will go forward, but will be delayed by a year. At the same time, he assures Congress that they can balance government spending. Maryland Senator Barbara Mikulski jokes that the President “sounds a lot like a Democrat liberal”.
A US Federal Court partially upholds complaints made by Intel regarding microcode on their computer chips, stating that it is protected intellectual property but that NEC Corporation and Union Telecomms made changes to the microcode for their Japanese and Soviet customers respectively. As such, neither company is judged to have infringed Intel’s copyright and both proclaim it is a victory for the “technological and information revolution”.
US pork rind manufacturers note that consumption has been up ten percent over the last two years and directly attribute the boost to the known consumption of President George Bush. “He’s done for us what Reagan did for jellybeans,” says one. Profits from the Presidential endorsement are estimated to exceed $40 million.
US Housing Secretary Jack Kemp suggests that the homeless voucher program could be expanded to allow broader eligibility so that it can be used, not just to pay rent, but potentially to pay part of a mortgage on new housing construction. He admits that the earliest it could be introduced would be January, 1991, but states that the Administration is considering all options.
New polling on gun ownership in the United States show that 91% believe crime is getting worse and that 89% believe that it is because of gun violence. 94% state they would support a two-week waiting period (Congress argued for seven days; the President argued for three). 69% supported “tough anti-gun legislation”, with 56% stating semi-automatics should be completely illegal. However, 79% say people have a right to own guns, probably because 48% believe they cannot rely on police protection, but 59% agree that the NRA has too much influence. 43% of the population believe that the new gun laws will have minimal effect. They are backed by the First Lady, Barbara Bush, who today uses the polling to tell a crowd of reporters that she “absolutely and enthusiastically favours” bans and restrictions on gun ownership.
With new Internal Revenue Service rules which require businesses to keep track of tips, it is predicted that the American culture of tipping may disappear. Some restaurants begin to decline tips, instead imposing a service charge of 15% on the bill which is paid out to waiting staff on an hourly basis or under an incentive plan as to how much they sell, like in Europe. While some customers complain that they would not have tipped, waiting staff declare their support. Under the old system, they received $2 an hour plus tips. Under the new system, they receive $8 an hour or 10% of their total weekly sales, whichever is greater.
Former California Governor Jerry Brown takes over as Democratic Party chairman in his home state. During an interview to mark the occasion, he refuses to rule out a tilt at the presidential nomination in 1992 and states that he has strong connections in both the West and the Northeast.
Complaining about abuse of the liberal US immigration system, US President George Bush states that the outside world has used his attempt to normalise the system through an amnesty as the sign of an open door. He states that “the burden has now become so large that it is time to slam the door. Our moral responsibility is not unlimited, and the promise of the Statue of Liberty is not endless. It is time for our country to put up, at least for the time being, the ‘No Vacancy’ sign.” He draws attention to the ongoing droughts, water shortages and the fact that the US is now a “food deficit” nation.
US President George Bush announces his intention to visit China, South Korea and Japan next week to begin to address concerns over the continuing trade deficit. Two thirds of the trade deficit is with East Asia. He states that he also wishes to make clear to Asian investors that the United States is seriously dealing with its own budget deficit and lack of savings, and that, with lower tax rates, it is a place that investors will want to do business.
US Vice President John Heinz claims credit for the Administration after the sudden collapse of refugee arrivals on the southern border, claiming that new immigration rules introduced in January are working. As part of the tougher stand, potential refugees are detained in centres until they can be processed. He points out that, last year, thirty thousand people applied for refugee status at the border crossing. On current trends, it is expected that number will be halved during 1989 and that only about 150-200 will meet new stringent criteria.
Paul Weyrich, co-founder of the Heritage Foundation and the Moral Majority, dies in a motor vehicle accident during a trip to Germany. One of the leading voices of paleoconservatism in the US, he was there to lobby for increased democratic pluralism in Eastern Europe and support for small capitalist enterprise, but had reported indifference from various contacts.
A new inflation report shows that the CPI rose by 0.5% in January, while wholesale prices rose by 0.8%. Federal Reserve Chairman Walter Wriston insists that he will retain the discount rate at 6% (prime lending rates at 10.5%), despite concern about the cost of the bailout of the savings and loan industry and now worries that inflation may get out of control. Markets show their lack of confidence in the Fed, with the Dow Jones falling once again, to 2133.26 points.
A court in Chicago rules that placing the Stars and Stripes on the floor in an art installation is protected free speech. Several veterans groups claim that the interactive art work is inviting people to use the flag as a doormat and suggest that the art work is “Communist”.
The US Congress creates an “investagory oversight board” for Washington DC, using the Marion Barry cocaine scandal as their excuse. Columbia Heights and the suburbs off Anacostia Park become areas under 90-day curfew between midnight and 6am. It is a determined effort to clean out the drug which has “even captured our poor Mayor”, according to Walter Fauntroy, the new board head. Nobody seems to be talking about dismissing the Mayor, who remains popular despite the scandal.
Archbishop Roger Mahony of Los Angeles admits that he is undertaking “serious investigation” into allegations against a local Catholic priest. He states that pedophilia is a “terrible sin and crime” and offers to establish a $400,000 fund from his personal donations towards compensation of the victim. As it will turn out, this will not be anywhere near enough.
In the stand-off with Senator Jesse Helms over the confirmation of Lawrence Eagleburger as Deputy Secretary of State, White House Chief of Staff Craig Fuller announces the nominee has withdrawn from selection and that the President is forwarding the name of John Weinberg, the outgoing senior partner of Goldman Sachs. Weinberg is quickly confirmed and Helms has to give up on his claims for a post in Treasury.
In a historic agreement, Scandinavian Airlines System will invest $450 million to cover the debts of Texas Air and takes the entire group into bankruptcy to allow for a restructure of the companies, which will continue to operate under the Continental badge. Eastern Airlines will also disappear from the air.
The Congress passes a resolution granting to President George Bush the ability to declare martial law in the United States and its territories in relation to Asclepius. On the same day, the President calls on the nation not to panic and displays “business as usual”, announcing a planned increase in the minimum wage from $4.20 in 1990 to $4.35 in 1991 and $4.55 in 1992. He point out that this fulfills out of his basic election promises.
After the favourite of Democratic National Committee, Richard M. Daley, wins the position of Mayor of Chicago, Rev Jesse Jackson announces that he has reversed his position and will not run for the 1992 Democratic nomination.
The Washington Post carries a leaked State Department document, criticising the performance of Senator Bob Dole, the Senate Minority Leader, and suggesting the Republican Party would be best served by having 56-year-old Richard Lugar of Indiana or 55-year-old Orrin Hatch of Utah in the role. Senator Dole criticises the Post for “playing politics at such a time”.
The World Health Organisation announces the beginning of a “massive offensive against measles” in the Americas, predicting that it can eliminate the disease from the two continents within a decade. US Vice President John Heinz, addressing the launch, points out that the White House has been the largest contributor to this project. He justifies the increasing stability in the Americas as providing a “timeframe for labouring on this issue”.
The wife of the Massachusetts Governor, Kitty Dukakis, books herself into a Rhode Island alcohol rehabilitation clinic. She releases a statement that the campaign for President had been a positive experience and had not contributed to her fall into alcoholism. Nonetheless, her husband is now considered unlikely to run at the next election.
Charles Gardner, a senior executive with Unisys, testifies that he paid over $5 million in bribes and illegal campaign contributions to members of the US Congress. He names Congressmen Roy Dyson (D) of Maryland and Bill Chappell (D) of Florida, in addition to the Republicans in the Administration already facing charges.
The US National Institute of Health praises the decision by the Bush Administration to commit $3 billion for the Human Genome Project. They warn that the Soviets, who committed to the project some time ago, are at least three years ahead of American researchers in their pursuit of the Holy Grail of biology, but that the project is expected to take up to fifteen years and there is the opportunity to overtake the Soviets if the government makes the issue a priority.
During a tourist visit to the Long Beach Naval Shipyard, an Iranian-born UCLA student attempts to take a bomb on the USS Yorktown (CG-48), a Ticonderoga class cruiser which had been undergoing repairs in dock. Investigation will soon establish that he is actually a member of the Revolutionary Guard, but the Iranian government disavows all knowledge of his actions. The FBI begins an investigation which will eventually see the deportation of nearly three hundred of the ten thousand Iranians living in the United States.
The B-2 Spirit, also known as the Stealth Bomber, is flight tested over California. The extremely controversial project provides the US Air Force with the capacity to penetrate anti-aircraft defences and is configured to drop guided and nuclear bombs. The Soviets are not expected to be able to test their version of the bomber for at least a year.
Recent polls continue to indicate strong support for US President George Bush. His approval rating ranges from 56% to 68%, depending on the geography of the poll. The only question is about the appearance of complete control by White House Chief of Staff Craig Fuller, who is said to be trying to overly manage the ad hoc President.
The Republican National Committee elects a new chairman, former US trade envoy Clayton Yuetter of Nebraska. While the money had been on Lee Atwater of South Carolina, his tactics in the most recent election and links to questionable business deals have led the President to discourage his candidacy.
The US Federal Communications Commission removes the last regulations over AT&T profits, effective from 1 July, signalling the beginning of a predatory price war which will end with its complete takeover of US Sprint.
The US trade deficit for January comes in at $8.01 billion, the lowest figure since last March, with imports falling by 7% over the previous month. However, this is overshadowed with report that producer prices have risen at an annual rate of 8.4%, arousing fears of growing inflation and a slowing economy. The Dow Jones responds by falling to 2177.53 points, its sharpest one day decline in a year.
Former US Senator and presidential candidate Barry Goldwater states that the “radical religious right” should “get out of the Republican Party” during a television interview. He accuses former nominee Pat Robertson of attempting to hijack the party and suggests that he should form his own “do-gooder” political organisation and “stop dictating their own beliefs to others”.
In the first case of its kind, a Tennessee appellate judge awards a divorcing woman the custody of IVF embryos created by the couple in the course of their nine-year marriage. It holds that the embryos are not property, but refuses to find that they are human individuals, stating they only hold the potential for human life.
US President George Bush imposes a ban on the import of all foreign semi-automatic weapons, allegedly on the advice of his drug czar, Jack Lawn. He states that, when the Constitution framers provided Americans the right to bear arms, there was no way they could have envisaged “semi-automatics in the hands of drug-crazed psychopaths” and law enforcement officials at the mercy of criminals.
US President George Bush rejects Democrat demands for a further 10 cents per hour on his planned minimum wage increases, stating that any further increase would be “excessive”. He suggests he may reconsider it if the Democrats are willing to establish a two-month training wage at 75% of the minimum wage.
The US Supreme Court rules that the government of New York City is unconstitutional, violating the principles of one person, one vote by giving equality to each of the borough presidents. It leaves the nation’s largest city without a legal government, but it is agreed that the current administration can remain in place until a referendum can be held on the future of the city.
For the first time in US history, this month it will consume more in oil imports than it does in domestic oil supplies. The Iraq-Syria War has pushed up prices to $22.35 per barrel, encouraging US providers to lock in contracts for supply with foreign suppliers willing to stick with the OPEC ceiling price. Analysts point out that, adjusted for inflation, the price of gasoline remains at 25-year lows.
Senator Mark Hatfield (R) of Oregon narrowly escapes being shot during a late night walk six blocks from the Capitol building. His colleague, Senator Warren Rudman of New Hampshire, suggests that the District of Columbia’s beleaguered police should be supplemented with National Guardsmen and placed under direct federal control. The motion becomes bogged due to questions about how to find a balance between liberty and order in the US capital.
Randall Dale Adams, a death row inmate in Texas, is released by the US Court of Appeals after twelve years in prison for a crime he did not commit. His release is largely due to the documentary, The Thin Blue Line, which demonstrates perjury by key witnesses in the case with the knowledge of the prosecutor.
The US Supreme Court upholds, by 6 to 3, the constitutionality of government regulations that require railroad crews involved in accidents to submit to prompt drug testing, but rules 5 to 4 that US Customs employees seeking to work in the field of drug enforcement field cannot be forced to submit to the same without “reasonable suspicion of drug use”. Reagan’s anti-drug executive orders have resulted in significant litigation and fourteen challenges are still working their way through the courts.
Californian authorities announce that the price structure of water in the state will be changed. Currently, farmers are paying $10 per acre foot, compared to $230 for urban dwellers. Governor George Deukmejian argues that this is resulting in significant waste by farmers, who use 85% of the state’s water. Accordingly, he will remove subsidies on water costs gradually, pushing prices to $60 per acre foot from next year and $120 from 1992, replaced with significant subsidies to upgrade current irrigation infrastructure.
US Vice President John Heinz defends new fishery regulations which cut the volume of catch for haddock, skates and Atlantic cod and closes part of the Georges Banks to fishing. He warns that this is necessary for fish stocks to rebound as scientists have expressed concern at the low biological diversity of some stock. He warns that greater global restrictions might be necessary for tuna, marlin, swordfish and some species of shark.
US President George Bush condemns former National Security operative, Oliver North, for claiming in a book that the President had actively participated in the deal to illegally finance Nicaraguan rebels. “We’ve been over all this,” Bush states, “and my role was known before the election. For the Lieutenant Colonel to raise new allegations when he is publishing a book is somewhat coincidental.”
New CNN polling in the United States finds that President George Bush’s approval rating is currently 51%. This is far lower than expected and a fall of 7% on the last poll. He suggests, when asked, that this may be to a lack of “big publicity” recently and tells journalists that he is “much more about policy than entertainment”. He admits to “some distraction” from the job after Millie, the White House dog, produces a litter of puppies.
KLM, the national Dutch airline, announces a $2.9 billion takeover bid for Northwest Airlines, $300 million higher than a bid by a Californian-based investor group already spurned by the directors. By the time the board agrees to the deal, with the proviso that the corporate identity be retained on US routes, KLM will already have accumulated 8% of the stock.
The US Government seizes the assets of the Lincoln Savings and Loan Association following questions of corruption. A former economics advisor to President Ford, Alan Greenspan, and five Senators are accused of corruption after intervening to protect the association from regulatory intervention. Among the accused are Senate Majority Whip Alan Cranston, chairman of the Senate Committee on Governmental Affairs John Glenn, and chairman of the Banking Committee, Donald Riegle.
Senator Al Gore of Tennessee, who is widely expected to be a candidate for the presidency in 1992, leads a campaign to kill off Senate efforts to allow drilling in the Arctic National Wildlife Refuge. He is accused by Alaskan Senator Frank Murkowski of conducting a “fear campaign” when Gore raises the subject of global warming as a reason why the United States needs to “end its dependence on fossil fuel energy”.
US President George Bush proposes the head of the Atomic Energy Commission, Robert Hirsch, as the US representative for the committee suggested last month for international cooperation towards the creation of a commercial fusion reactor by 2010. The endorsement of the project by both the CSSN and the USA signals the beginning of conceptual planning for the 2 gigawatt reactor.
The US unemployment rate for March comes in at 5.0%, remaining at a record low. Federal Reserve Chairman Walter Wriston warns, however, that the employment expansion is coming to an end and that the economy may be softening. It opens speculation that the discount rate is again headed below 6%. He also states that it is a matter of urgency for US commercial banks to resolve their stand off with Latin American debtors by lowering interest charges on sovereign debt themselves rather than relying upon the Administration to enforce their “onerous” debt contracts.
House Majority Leader Jim Wright (D) of Texas is forced to resign after the House Ethics Committee questions his intervention in a savings and loan issue, his advocacy on behalf of the Egyptian government, his deals with a Fort Worth developer, royalties on a book and employment of his wife.
Douglas Wilder wins the Democratic Party nomination to contest the position of Governor of Virginia. If victorious, he will be the first African American to be elected to the position of Governor. He tells media that his victory will deal racial politics a “severe blow” in the former Confederate stronghold.
US 1960s radical social activist Abbie Hoffman is laid to rest in Worcester, Massachusetts. The founder of the counter-culture Youth International Party, known to have bipolar disorder, is confirmed to have overdosed.
US Drug Enforcement Agency Administrator, Jack Lawn, announces the creation of a new 1,040-bed drug rehabilitation centre in Washington DC. He states that the facility will be used for “small-time offenders” as part of a new compulsory treatment program. He also states that the Agency will dedicate eighty new agents to “cleaning up the capital”.
Drexel Burnham Lambert investment firm cuts all ties with its former chief earner, junk bond king Michael Milken, who is facing criminal charges of racketeering and securities fraud. It allows the company to close the book on the federal probe of its affairs, settle $600 million in fines for insider trading and commence the process of the company’s sale to Smith Barney.
Tom Bradley is elected to his fifth term as Mayor of Los Angeles, guaranteeing him the longest tenure of any mayor in the city’s history. Commentators note that turnout was so low that Bradley’s majority was attained with the support of only 11% of potential voters.
Democrats in the US House of Representatives elect Dick Gephardt as the new Majority Leader, the No.2 position in the caucus hierarchy and second only to Speaker Tom Foley. It opens speculation as to whether Gephardt will again run for President in 1992, given his higher profile, or whether he will wait for his opportunity for the Speaker’s chair, which is likely to fall his way around the middle of next decade.
US Treasury Secretary Nicholas Brady announces that, as part of the budget plan for the Administration, the excise on cigarettes will rise from the current 39 cents per packet to 45 cents per packet by 1992. The decision is particularly unpopular in the South, with some popular but ineffective protest movements starting up in Missouri, Virginia, Louisiana, Georgia and Alabama. Brady defends the move, not just as a revenue measure, but as an attempt to keep youth experimentation from rising above 25% (this will occur in 1991, but drop back below the threshold in 1992).
US President George Bush and congressional leaders gather in the White House Rose Garden to announce an agreement on the 1990 budget. While the agreement only has “broad strokes”, a realistic estimate puts the deficit for the year at around $82 billion. He also states that the Administration is close to an agreement with the Congress to create a “training wage” for new workers, stating they have reached an in-principle agreement but are still negotiating the length of time it could be paid before moving to a minimum wage.
Gulf+Western, the once massive and diverse conglomerate, completes its long restructure to become Paramount Communications with a sizable $3 billion in cash available for expansion. Chairman Martin Davis suggests that the company is now looking for targets for expansion and will eventually settle on a takeover bid for CBS Studios, whose television network has fallen into a deep slump.
US House Minority Leader Edward Madigan leads the House in admonishing former House Majority Leader Jim Wright and calls for an investigation into a company called Mallightco, claiming Wright was involved in fraud and insider trading. Wright responds by stepping down from his House seat.
US Treasury Secretary Nicholas Brady comments that the S&L rescue package will bring with it government ownership of a broad range of assets, including country clubs, hotels, a polo complex, a financial service company, 1.3 million acres of farmland and seventy thousand homes. He admits frankly that it could take fifteen years for the government to recuperate the money, but that, over the life of the scheme, it could make $50 billion in profits. He recommends the creation of an entrepreneurial asset management company to take up control of these various properties until they can be recirculated into the private market.
International arms trader Adnan Khashoggi is arrested over charges relating to racketeering in New York real estate. Khashoggi is famous as one of the negotiating parties between Israel and Iran in the Irangate affairs.
The US National Organization for Women calls for new legislation to protect citizens “using their Supreme Court protected rights” against claims of assaults against women accessing abortion clinics in California. The alleged assaults are by members of Operation Rescue, an evangelical Christian pro-life group. A recent US poll on abortion shows that 45% believe “abortion is wrong”, but that 59% nonetheless support the Roe v Wade decision. 67% oppose limiting a woman’s right to have an abortion and 72% agree that the decision should be left to a woman, acting with medical advice.
It becomes clear that Federal budget cuts are impacting across the US states, as a series of governors across the political spectrum announce a series of levies, licensing fees and other new tax increases to pay for increased health service and aged welfare obligations. The governors collectively blame the US Administration.
Chicago’s new mayor, Richard Daley, runs into trouble in his first days over efforts to designate Al Capone’s former home as a historic site. Neighbourhood residents complain that they don’t need the tourists and Italian-American groups state they are being defamed.
US President George Bush makes a visit to Australia to sign a new agreement extending the US lease on the Pine Gap facility for the next fifteen years. Australia and the United States also agree to a joint program to scan all of space for near earth objects by 2004. The Jet Propulsion Laboratory has been given responsibility for developing more refined weapons for dealing with near-Earth objects in future. Prime Minister of Australia, Bob Hawke, agrees that “the future of the alliance is secure”, though there is some doubt about “the finer details of our mutual responsibilities as partners”.
US Housing Secretary Jack Kemp suggests a tough eviction policy where people convicted of dealing in drugs can be forcibly removed from public housing. He will also be implementing security guards and residence photo identification in apartment buildings. The ACLU criticises the policy, warning that innocent people may be made homeless, but Kemp insists that he is finding a balance between the rights of residents and the rights of criminals.
Govenor Cecil Andrus of Idaho announces the arrest of 71-year-old Richard Girnt Butler on charges of sedition. Butler, head of the neo-Nazi Aryan Nations group, is said to be one of six co-conspirators in a plan to overthrow the US Government. He suggests that other members of the organisation might be indicted under racketeering laws.
Wisconsin Governor Tommy Thompson refuses to intervene after the state legislature adopts a plan to promote racial civility. Under the legislation, students caught expressing racial epithets in a threatening manner will be expelled from any publicly-funded institution. Thompson, who won his position by less than 1%, is coming up for re-election next year.
The Dow Jones closes out at 2288.55 points, indicating a potential return to recovery. In the past twelve months, up to 8% of employees in the securities industry have been laid off; strong calls for lower interest rates to boost the economy. However, optimists point to the size of the stock exchange membership has only fallen by 2% as a sign the industry is becoming “leaner”.
US President George Bush is in California and catches up with his predecessor, President Ronald Reagan. The two men are judged to be uncomfortable with each other, leading the press to speculate that the visit may be because of declining support for the incumbent on the Republican right. Former White House Communications Director Patrick Buchanan criticises Bush, stating that his “era of bipartisan peace” is no longer “workable for Americans”. He points out that Bush has consulted more with former President Carter, than Presidents Nixon or Reagan, and suggests that “many of us are beginning to suspect he’s a liberal Democrat”.
The collapse of Texaco, sold off between Mobil, Exxon and Chevron, combined with oil prices, prompts further consolidation in the oil industry, with Chevron announcing its intention to acquire Philips Petroleum Company. The combination will make Chevron the third largest oil company in the United States after Mobil and Exxon, and the fifth largest in the world.
US Interior Secretary Manuel Lujan declares the northern spotted owl to be a threatened species, making it a crime to disturb the bird’s habitat. The owl lives among the old forests of the Pacific Northwest, which has been undergoing clearing at a rate of 50,000 acres per year. Governor Booth Gardner (D) of Washington supports the action, but calls for federal funding to assist in retraining for thirty thousand loggers who will now become unemployed. This call is supported by Governor Barbara Roberts (D) of Oregon and Governor George Deukmejian (R) of California.
US Treasury Secretary Nicholas Brady expresses surprise over demand for Treasury securities as the number of T-bills released to the market each year have begun to decline. He also points out that many investors are now bypassing the brokers and merchant banks to buy directly from Federal Reserve buildings.
At request of the Defense Department, Harvard University holds a conference to reconsider the ban on army recruiters, installed during the tumultuous Vietnam protests in the late 1960’s. The university council decides to uphold the ban, but changes the justification for the action, stating that it will allow the recruiters to return when the armed forces ends its discrimination against gay and lesbian Americans.
Following new statistics in the United States showing 5.3% unemployment, a substantial jump in jobseekers, Federal Reserve Chairman Walter Wriston announces a cut in the discount rate to 5.75%. He suggests that inflation is under control. Despite the cut, the Dow Jones fails to rally, closing the day at 2262.86 points.
By the narrowest of margins, Louisiana Governor Buddy Roemer (D) succeeds in getting voters to endorse his tax plan in a referendum. He states that the cuts to business tax will enable him to reverse the nation’s highest unemployment rate and invest in improving the country’s worst-rated education system.
West Virginian Governor Gaston Caperton pushes through a controversial reconstruction program for the debt-ridden state. It marks the beginning of a financial turnaround for the moribund economy and an end for record unemployment rates.
DuPont and Dow Chemicals form a joint company called Waste Solutions. They establish an objective for expanding their share of the waste recycling market from 1% to 25% by the turn of the century. They are responding to tighter state environmental regulations and the United States production of billions of kilograms in recyclable waste each year. Recycled plastic costs about two-thirds that of new plastic. By the turn of the century, Waste Solutions will be a $300 million company.
US Vice President John Heinz states that, following the President’s attendance at UN Earth Summit in Paris, he will work to implement an emissions trading framework for all air pollutants and establish national air quality standards. He admits that the debate will be long, fierce and divisive, but that some elements of the White House plan will be “non-negotiables”. He refuses to discuss details immediately, but says he has sought advice from NASA and has consulted with Senator John Chaffee (R-RI) and Senator Al Gore (D-TN) in drafting the plan. Commerce Secretary John Sununu, asked to comment on business effects, says “the scope and importance of this issue is so great it is necessary for the United States to take a leadership role”.
The US Congress passes legislation making it illegal for car manufacturers to use CFCs in their air conditioners from 1993. It is part of the US plan to comply with the Montreal Convention, but is naturally unpopular in Michigan. Vermont Governor Madeleine Kunin of Vermont, mentioned as a potential Vice President at the next Democratic convention, thanks the Congress for their “environmental consciousness”.
A red toxic bloom appears off Florida which is larger than any previously recorded. Concern is also expressed by local activist groups that the blooms are becoming increasingly regular.
A US Justice Department investigation finds that members of the Bureau of Indian Affairs conspired with private companies to steal oil from the Osage people in Oklahoma. Charges will be suspended after the companies agree to pay $60 million in compensation. The crime was uncovered by Senator Dennis DeConcini (D-AZ), one of those under investigation for corruption in the Keating Five affair.
US entrepreneur Ross Perot announces the formation of the Reform Party. He points to the Keating Five and the resignation of the House Majority Leader as signs of a “sick Washington culture”. He also declares his support for multilateral trade negotiations over bilateral free trade agreements. He states that he has no desire to run for President, but will fund the right candidate for the job as backed by “the alienated majority”.
Charges are laid against executives in Gulf Power, the largest energy provider in Pensacola, for receiving kickbacks. Former company vice president, Jake Horton, has turned state witness after 33 years with the company. There are allegations that a former director of the company and his wife were murdered over threats to reveal the corruption.
Following an investigation into the US Housing and Urban Development Department, it is confirmed that a grand jury will now investigate Ronald Reagan’s first Interior Secretary, James G Watts, for influence peddling. Among those who are also under subpoena are former Senator Edward Brooke (R-MA) and Ambassador Philip Winn and Associate Solicitor of the US Interior Department, Gale Norton.
Comprehensive figures are released by the Federal Reserve to account for their recent decrease in interest rates. Growth is up in the farm belt, recovering from the drought, but remains sluggish elsewhere and this has temporarily inflated the GNP figure. However, unemployment is starting to grow, consumer spending is virtually flat and the stock of unsold houses is rising by nearly 2% per month. Automobile sales are down 2% and the Big Autos will make less cars this year than in 1983. GM is giving some of its employees one month of holidays each year. The dollar has risen by 6% in the last year, depressing international demand for US goods, and US exports grew 15% this quarter, down from 30% at this time last year. Walter Wriston states that recession is a greater threat than inflation, stating a recession could add $75 billion to US foreign debt. Therefore, he insists there must be downward pressure on US interest rates. He also points out that producer prices are dropping due to new efficiencies. The report takes the Dow Jones to 2317.72 points, the highest level since the 1987 crash. Prominent economist Alan Greenspan disagrees with Wriston, stating he still sees the threat of inflation and would increase interest rates by at least 1%.
Governor Michael Dukakis of Massachusetts admits that he was unlikely to win the election next year, stating that there is a degree of “venom” in the community over recent tax increases. He projects that his political situation will begin to turn around before he leaves the office in January, 1991 and he continues to refuse to say whether he will make a run at the next presidential election.
Jordache Enterprises Inc announces a takeover of Los Angeles rival, Guess, Inc. for an undisclosed sum. The latter brand will disappear over the next eighteen months, with the last Guess watch being made in 1990.
An anonymous donor pays $235,000 on behalf of the US National Archives for a .38 calibre Colt Cobra, the weapon used by Jack Ruby to assassinate Lee Harvey Oswald. The purchaser at the auction is not identified, but claims to only be representing a third party anyway.
Comments by US Federal Reserve Chairman Walter Wriston to a private meeting are leaked to the media. He states that there is excessive upward pressure on the dollar at the moment due to political instability in Japan and Germany and indicates the likelihood of a further cut in interest rates next month. Wriston refuses to comment on the leak on a day that the US trade deficit for March comes in at $6.37 billion, a very low figure.
Commenting on crime statistics, US President George Bush argues against emerging state propositions calling for minimum sentencing laws, arguing they may result in violation of the “cruel and unusual” clause of the Constitution, but that he would support maximum sentence increases. The President has announced today his intention to make permanent the temporary ban on the importation of assault-style rifles and $1.6 billion in new spending to appoint more judges, process cases with greater speed and establish community projects for non-violent offenders.
US Education Secretary Lauro Cavazos announces his resignation, only months into the job, citing “personal concerns” and requesting respect for his privacy. He is replaced by former Governor of Oregon, Victor Atiyeh. It is suggested that Cavazos may have been “out of his depth” in implementing the President’s reforms.
Recovery is beginning to take hold in Yellowstone National Park after the 1988 fires. There was a two percent fall in the number of grizzlies and a smaller fall in elk populations, but a quarter of the bison were destroyed. It is now agreed it was not as bad a disaster as Mount St Helens was eight years earlier. However, there are concerns among scientists regarding the dramatic fall in numbers of whitebark pine.
Senator Alan Simpson (R-WY) and Senate Minority Leader Bob Dole call for an Ethics Committee investigation into Senate Majority Whip, Alan Cranston, named as one of the five senators involved in corruption allegations. There are calls for the four most senior accused, all Democrats, to give up their committee and party positions until an investigation can be completed.
Senator Al Gore (D-TN) joins Energy Secretary John Watkins in calling for a change in rules governing employment of technical specialists in his Department. He states that maintenance of the current regulations is depriving the Administration of the “best minds” in considering the future energy needs of the country. Gore is attending the upcoming Earth Summit.
California Governor George Deukmejian (R) announces that, due to the “unexpected windfall” of the Bush education reforms, he will be able to increase teacher wages in his state by 26% over three years. He demands to be able to restore health spending before further teacher demands, with health having undergone cuts in his early years as Governor. The comments follow the recent Cavazos resignation and appear intended to assure educators of the Administration’s ongoing commitment to spending.
US Vice President John Heinz admits that there is the potential for higher oil taxes if they are “economically and ecologically sustainable”. He claims that the United States has historically paid a low price for its energy, but that energy prices are certain to rise under any future environmental model. He states that tax changes will depend on “long-term commodity prices”. He also insists that, after 31 December, US car manufacturers will not be able to sell any vehicle averaging less than 27.5 miles per gallon, an indirect attack on General Motors, who was seeking an extension.
San Francisco becomes the first city in the United States to allow citizens to register domestic partnerships in the same way they file for a marriage license. It opens up the first step towards legal recognition of defacto and same-sex relationships, and extends health benefits to the domestic partners of city employees.
Corporate raider Carl Icahn announces that he is unloading his 17% stake in Chevron at a profit of $630 million. Rumours abound that he will use his newly-freed capital to take a 35% ownership in steel conglomerate, USX Corporation, but the investor refuses to tip his hand.
Following a broadcast of America’s Most Wanted, murderer John List is captured by Virginian law enforcement officers. In the coming year, he will be convicted and sentenced to five consecutive terms of life imprisonment.
US Energy Secretary James Watkins declares himself to be a “strong supporter” of nuclear power after issuing permits for the construction of two new nuclear power plants by General Electric in the states of Washington and New York. It is estimated that both Generation III+ plants will take six years to construct and will have a minimum of sixty years of operation. The lack of strong public response indicates that the US public may finally have moved past the Three Mile Island disaster.
US Defense Secretary Dick Cheney announces that the Iowa class battleships will be decommissioned over the next three years. The four vessels, built during World War II, represent the last battleships in operation worldwide and their decommissioning brings to an end an era which had begun with Le Napoleon (1850).
Representative Jim Leach (R-IA) introduces a private members’ bill to alter rules governing campaign financing, gifts and honorariums to Congressional members. He argues that increased public funding of elections, introduced two years ago, allows for a closure of the Section 527 loophole, elimination of “soft money” and prevention of advertisements by non-party organisations.
US President George Bush is forced to deal with allegations of “a disgusting smear campaign” of homosexuality against Speaker Tom Foley by his domestic advisor, Lee Atwater. It is also alleged that an aide to GOP House Deputy Whip, Newt Gingrich, has been pushing the rumour. Massachusetts congressman Barney Frank threatens to “out” Republican officials who are homosexual, adding that “my list will be an accurate one”, unless Atwater is dismissed. The President states that, upon his return, he will ask for Atwater’s resignation, arguing that “we cannot foul our civic environment with vicious misinformation and hypocrisy”.
The first people charged in the Pentagon procurement scandal appear before a US District Court, being executives of the one of the companies involved. They are sentenced to six months imprisonment out of a possible twenty years, sparking anger by the federal prosecutor.
A citizen-initiated referendum in Sacramento, California, designed to ban future construction of nuclear power plants, obtains 48.4% support but fails to pass. The US Council on Energy Awareness, a pro-nuclear lobby group, state that this is an “unprecedented psychological breakthrough for advocates of a safe and economical nuclear energy future”.
A federal appeals court in Denver, Colorado finds that, thirty-five years after Brown v Board of Education, the schools in the state of Kansas remain segregated. While there has been no active resistance to desegregation, the court finds that the state has been exercising “benign neglect” concerning racial imbalance.
The US Environmental Protection Authority demands the closure of the Rocky Flats nuclear weapons plant in Colorado, stating evidence of fraud relating to the disposal of plutonium waste and traces of strontium and cesium in the surrounding soil. Energy Secretary John Hopkins states that this is part of a departmental “clean up”.
Kraft Incorporated, recently purchased by Philip Morris Companies, records a one-time loss of $170 million after a misprint in promotional materials leads to hundreds of grand prize winners of a Dodge Caravan FF.
US President George Bush confirms that the Administration had backed a $120 million loan to Chinese national oil company, Sinopec. Defending the decision, Bush states that the United States “cannot afford to just opt out of markets because they have Communist governments, especially ones with the size and potential of the Soviet Commonwealth and China. To do so would turn the market over to future Japanese control.”
After Congressional attempts to weaken the capital requirements of the White House’s thrift reform package, President George Bush warns that he will veto the bill rather than allow his fellow Republicans, led by Henry Hyde of Illinois, to water down the legislation. “We cannot allow the industry to play some giant game of roulette with taxpayer money,” he states.
Citing the recent death of leading member Paul Weyrich, the founder of the Moral Majority, Jerry Falwell, announces that the organisation is being shut down. Most analysts state the end of the Moral Majority has more to do with tensions between Falwell and another leading member, Reverend Pat Robertson, over the direction of the organisation.
US President George Bush and Vice President John Heinz announce a comprehensive beginning to their environmental plan. It calls for a price on sulphur dioxide emissions of $745 per ton with the objective of cutting the emissions to half 1980 levels by the end of the century. It also outlines a cut of two-thirds in motor vehicle emissions due to tighter regulatory standards. Bush also outlines a plan to increase production of sugar beets, which can be converted into ethanol and used as a blend with unleaded petrol to reduce pollution. Senators Robert Byrd (D-WV) and John Dingell (D-MI) call on the Democratic majority to block the plan, the former due to large coal operations in his state and the latter due to Big Auto lobbying.
Minimum wage legislation, locking in the $4.55 an hour for 1992 proposed by the President, is passed by both houses of Congress. It also allows for a two month “training wage” of $3.65 per hour, which is less than the six months originally proposed by the White House. An addition by Congress is that tax credits for low-income workers are improved, giving special deductions of $850 per annum.
Housing and Urban Development Secretary Jack Kemp announces that an audit of his department has resulted in the dismissal of 53 officers for fraud. He pledges that he is reforming the department “from stem to stern”, but will be pushing for an additional $1.5 billion in the upcoming calendar year to expand housing programs.
By a vote of 6-3, the US Supreme Court upholds the right to burn the American flag as a protection of free speech. Justice William Brennan states that punishing desecration of the flag “dilutes the freedom that this cherished emblem represents”. Chief Justice Rehnquist is once again in the minority, when he states that it is the purpose of democratic society to ban conduct that is “evil and profoundly offensive to the majority”.
In a poll regarding proposals for environmental and legal controls on corporations at an international level through a Global Trade Organisation, 84% of US respondents state that too often their government sides with business rather than punishing them for criminal and environmentally harmful behaviour.
Senators Orrin Hatch (R-UT) and Christopher Dodd (D-CT) proposes legislation to add to the $1000 child care tax rebate which will be going to parents from next year. The bill, which will be passed in this session, gives $525 million to the states on a per capita basis to expand day care services.
US President George Bush criticises the Supreme Court decision on flag burning, stating that “Any virtue, carried to an extreme, can become a vice and no individual right is so absolute if it is outweighed by damage to the fabric of a society.” He rejects, however, calls for a constitutional amendment to deal with the issue.
US Attorney General Frank Keating announces that child pornography charges will be laid against photographic artist Robert Mapplethorpe. He states that he will also be asking the National Endowment for the Arts to withdraw all future grants to any gallery who persists in showing Mapplethrope’s work. His action is endorsed by Senator Alfonse D’Amato (NY), who states that “there is no constitutional right to taxpayer dollars in order to produce and promote filth”.