new century, new challenges, 1996 to the present · new century, new challenges, 1996 to the...

New Century, New Challenges,1996 to the Present

CHAPTER 32

Friday, February 26, 1993, began like most other business days at NewYork’s World Trade Center, two 110-story towers soaring over lower

Manhattan. But suddenly, at 12:18 P.M., a bomb containing over one thou-sand pounds of explosives ripped through Level B2 of the parking garageunder the north tower. The blast cut off electricity, plunging the building intodarkness. Fifty thousand workers hastily evacuated, and hundreds weretrapped in stalled elevators. Six persons died in the blast, and more than onethousand were injured.

The first investigators found an eerie scene: a giant hole extending fivestories underground, fires from ruptured automobile gasoline tanks, 124cars destroyed and others heavily damaged, water and sewage cascadingfrom broken pipes, car alarms wailing in the darkness. The FBI quickly iden-tified the vehicle that had carried the bomb into the garage: a Ford Econolinevan rented in Jersey City. Five Islamic militants, including a blind Egyptiansheik, Omar Abdel Rahman, the alleged mastermind, were arrested and con-victed of conspiracy and other crimes. Three, including Sheik Omar, werefound guilty of murder and received life sentences.

Shocking as it was, the attack could have been far worse: at least thetower had survived, and comparatively few lives had been lost. In reality, thisevent was one of a nightmarish series of attacks that would take a heavy toll in life and property, as the upsurge of terrorist attacks in the 1980s (seeChapter 31) continued. In November 1995 a bomb shattered a U.S. military

CHAPTER OUTLINE

The Clinton Era II: Domestic Politics,Scandals, Impeachment, 1996–2000

Clinton’s Foreign Policy: DefiningAmerica’s Role in the Post-Cold WarWorld

The Economic Boom of the 1990s

Disputed Election; ConservativeAdministration, 2000–2002

Recession Woes; EnvironmentalDebates; Campaign Finance Battles

September 11 and Beyond�

993

training center in Riyadh, Saudi Arabia, killing seven,including five Americans. In June 1996 another bombripped through a U.S. military barracks in Saudi Arabia,leaving nineteen U.S. airmen dead. Further deadlyattacks in East Africa and the Middle East killed moreAmericans.

Like distant thunder signaling an approaching storm,the attacks were ominous warnings of worse ahead. OnSeptember 11, 2001, terrorists again struck the WorldTrade Center, as well as the Pentagon, this time with hor-rendous consequences.

Much of this chapter focuses on the impact of esca-lating terrorist attacks, particularly the aftermath ofSeptember 11, at home and abroad. As Americans facedthese dangers, they also coped with domestic politicalbattles and economic turmoil. Amid calls for unity, deepdivisions remained. A White House scandal in Clinton’ssecond term, a disputed presidential election in 2000, andthe policies of Clinton’s successor, George W. Bush, whoseemed to favor the privileged and powerful, all provedhighly divisive. As prosperity gave way to recession, bank-ruptcies and charges of fraud hit some of the nation’slargest companies, undermining investors’ confidenceand tarnishing the reputation of the corporate world.

This chapter focuses on five key questions:

■ What domestic initiatives marked Clinton’s secondterm, and how did the scandals that swirled aroundhim in 1998–1999 affect his ability to govern?

■ On balance, was President Clinton’s foreign-policyrecord a success?

■ What factors fueled the economic boom of the1990s, and why did it end?

■ What key domestic policies did George W. Bush pro-pose early in his presidency?

■ How did the government respond to the terroristattacks of September 2001, domestically and inter-nationally? Was the response appropriate? Was iteffective?

THE CLINTON ERA II:DOMESTIC POLITICS,

SCANDALS, IMPEACHMENT,1996–2000

Moving to the political center, Bill Clinton won a secondterm in 1996. Apart from his support for tough regulationof the tobacco industry, Clinton’s second term is remem-bered mainly for a sex scandal that led to an impeach-

ment effort by his Republican foes. This effort furtherpoisoned an already highly partisan political climate.

Campaign 1996 and After; The Battleto Regulate Big Tobacco

After the Republican landslide in 1994, Clinton’s pros-pects looked bleak. But he had won the nickname “theComeback Kid” after a long-shot victory in the 1992 NewHampshire presidential primary, and he again hit thecomeback trail. Despite the missteps of 1993, he hadwon good marks for signing the budget-balancing andwelfare-reform bills (see Chapter 31). The Republicanssuffered a black eye in 1995 when House Speaker NewtGingrich, battling Clinton over the budget, twice alloweda partial government shutdown.

Clinton got another lucky break: a weak Republicanopponent in 1996. When General Colin Powell, the popular former chairman of the Joint Chiefs of Staff,declined to run, Kansas Senator and Majority LeaderBob Dole, a partially disabled World War II hero, won the nomination. A seventy-three-year-old party stal-wart, Dole ran a lackluster campaign, delivering woodenspeeches.

Clinton won with just under 50 percent of the vote,to Dole’s 41 percent. (The Texas maverick H. Ross Perotgarnered 8 percent.) The Republicans held control ofCongress, though Gingrich and other GOP legislatorsproved less combative than after their 1994 triumph.

The cost of television advertising continued to driveup campaign expenses, and fundraising scandals markedthe 1996 contest. One Democratic fundraiser with linksto Indonesian and possibly Chinese corporate interestsraised $3.4 million, of which nearly half was eventuallyreturned. After an event at a Los Angeles Buddhist tem-ple attended by Vice President Al Gore, priests and nunssworn to poverty contributed over a hundred thousanddollars to the Democratic cause. The money apparentlycame from Asian business tycoons eager to curry favorwith the administration.

Launching his second term, Clinton proceeded cau-tiously, further distancing himself from his party’s NewDeal-Great Society past. In 1997 he signed a Republicanbill providing some tax cuts and setting a timetable for abalanced budget by 2002. (In fact, as prosperity contin-ued, Clinton beat that deadline by three years.) ManyClinton proposals involved no legislation or spending.He urged parents to read to their children, and set up acitizens’ commission to lead a national dialogue on race.

Clinton cautiously defended affirmative action, butsupport for such programs was weakening, especiallyamong non-Hispanic whites. The Supreme Court re-

994 CHAPTER 32 New Century, New Challenges, 1996 to the Present

stricted the awarding of federal con-tracts on the basis of race in 1995, and in1996 California voters barred racial orethnic preferences in state agencies,including the universities.

Clinton did act forcefully on oneissue: tobacco regulation. In 1997, facinglawsuits by former smokers and bystates hit with heavy medical costs relat-ed to smoking-related diseases, thetobacco industry agreed to pay some$368 billion in settlement. The agree-ment limited tobacco advertising, espe-cially when directed at young people.

Since the agreement required gov-ernment approval, the debate now shift-ed to Washington. Southern legislatorsclose to the tobacco companies defend-ed the industry, but the Clinton adminis-tration supported a bill that would haveimposed tougher penalties, higher ciga-rette taxes, and stronger antismokingmeasures. Supporters of the administra-tion’s bill documented the industry’s manipulation ofnicotine levels and deliberate targeting of children. Theindustry struck back with a $40 million lobbying cam-paign and heavy contributions to key legislators, killingthe bill. Commented John McCain, Arizona’s maverickRepublican senator, “Some Republicans might be vulner-able to the charge that their party is in the pocket of thetobacco companies.”

In 1998, facing a wave of private lawsuits, the tobaccoindustry reached a new settlement, scaled back to some$200 billion, with forty-six states. Clinton, however, con-tinued to push for tougher federal regulation and forlegal action to recover Medicare costs arising fromsmoking-related illnesses.

In his January 1998 State of the Union address,Clinton boasted that his 1999 budget would include amodest surplus, the first in thirty years. Most of the sur-plus, he argued, should go to reduce the national debtand strengthen the social-security system, which facedeventual bankruptcy as the baby boomers retired.Clinton’s call to “Save social security first” not only madefiscal sense but also painted Republican tax cutters asirresponsible.

This speech defined Clinton’s second-term agenda.After the health care fiasco, he had abandoned large-scale programs in favor of modest proposals thatappealed to progressives without alienating moderates.He offered some initiatives to help the poor, such asenrolling the nation’s 3 million uninsured low-income

children in Medicaid. But he also introduced proposalsattractive to the middle class (college-tuition tax credits;extending Medicare to early retirees) and to fiscal con-servatives (reducing the national debt; shoring up socialsecurity). Some liberals dismissed Clinton’s program as“Progressivism Lite,” but it was politically shrewd. Undernormal conditions, the speech would have certifiedClinton’s political comeback.

Scandal Grips the White House

But conditions were not normal. Even as Clinton spoke,scandal enveloped the White House. Adultery chargeshad long clung to Clinton, and now he faced the PaulaJones sexual-harassment suit, dating from his days asthe governor of Arkansas (see Chapter 31). The SupremeCourt had helped Jones’s case by permitting lawsuitsagainst sitting presidents.

Seeking to show a pattern of sexual harassment,Jones’s lawyers subpoenaed Clinton and quizzed himabout reports linking him to a young White House intern,Monica Lewinsky. The president denied the story, as did Lewinsky in an affidavit. As the rumors became pub-lic (via an Internet website devoted to political gossip),Clinton denounced them as false. Hillary Clinton blamed“a vast right-wing conspiracy.” In fact, political conserva-tives were digging for damaging information on Clinton’spersonal life, and he helpfully provided them with amplematerial.

The Clinton Era II: Domestic Politics, Scandals, Impeachment, 1996–2000 995

Clinton settled the Paula Jones suit by paying her$850,000, but more problems awaited. In telephone con-versations secretly and illegally taped by MonicaLewinsky’s “friend” Linda Tripp, Lewinsky had graphi-cally described an affair with Clinton starting in 1995,when she was twenty-one, and continuing through early1997. On January 12, 1998, Tripp passed the tapes toKenneth Starr, an independent counsel appointed by athree-judge panel to investigate the Whitewater matter.At Starr’s request, FBI agents fitted Tripp with a record-ing device and secured further Lewinsky evidence.

Starr now focused on whether Clinton had com-mitted perjury in his testimony and whether he had persuaded Lewinsky to lie as well. In August, after jailthreats and a promise of immunity, Lewinsky admit-ted the affair in testimony before Starr’s grand jury. Soon after, in testimony videotaped at the White House, Clinton admitted “conduct that was wrong” with Lewinsky but denied a “sexual relationship” underhis rather narrow definition of the term. In a brief TVaddress, Clinton admitted to an inappropriate rela-tionship with Lewinsky, but called his testimony in theJones case “legally accurate” and attacked Starr as politi-cally motivated. The scandal provided grist for late-night

television, Internet humor, and conservative radio talk-shows.

Other presidents had pursued extramarital affairs,but by the 1990s the women’s movement and sexual-harassment laws had made such behavior increasinglyobjectionable. In a media-saturated age, politicians livedin the constant glare of public scrutiny. Indeed, politi-cians themselves had paraded intimate personal detailsfor political advantage. Unsurprisingly, then, the Clintonscandal unfolded on TV and in tabloid headlines.

Impeachment

In a September 1998 report to the House Judiciary Com-mittee, Kenneth Starr narrated the Clinton-Lewinskyaffair in lurid detail and found “substantial and credible”grounds for impeachment. The president, Starr charged,had committed perjury and influenced others to do thesame, and had obstructed justice by retrieving gifts hehad given Lewinsky and coaching his secretary on hisversion of events.

The Judiciary Committee, on a straight party-linevote, forwarded four articles of impeachment to theHouse of Representatives. In a similarly partisan vote,the House approved and sent to the Senate two articlesof impeachment charging Clinton with perjury in hisgrand-jury testimony and with obstructing justice. Forthe first time since Andrew Johnson’s day, a president ofthe United States had been impeached.

Opinion polls sent the Republicans an ominous mes-sage: most Americans opposed impeachment. In the 1998midterm elections, as the House impeachment processwent forward, the Democrats gained five House seats.Soon after, Speaker Newt Gingrich abruptly resigned boththe speakership and his House seat.

Since removing a president requires a two-thirdsSenate vote, and since the Republicans held only a fifty-five to forty-five Senate majority, the impeachment cam-paign seemed foredoomed to failure. Nevertheless, earlyin 1999 the new Senate conducted a trial. As ChiefJustice William Rehnquist presided, Republican mem-bers of the House Judiciary Committee, acting as theimpeachment managers, presented their case. WhiteHouse lawyers challenged what one called a “witches’brew of speculation.”

Paradoxically, as these events unfolded, Clinton’sapproval ratings soared. While the public clearly de-plored Clinton’s personal behavior, few believed that itmet the “high crimes and misdemeanors” standard setby the Constitution for removal from office. With theeconomy booming and Clinton adopting popular posi-


tions on most issues, the public appeared willing to tolerate his personal flaws. Further, many people con-cluded that whatever Clinton’s misdeeds, he was also thetarget of Republican zealots determined to drive himfrom office at a time of deep polarization in Americanpublic life.

On February 12, 1999, the Senate rejected theimpeachment charges and ended the trial. In a briefstatement President Clinton again apologized and urgedthe nation to move on. While some Republicans warneddarkly of a double standard of justice, most Americansfelt relief that the ordeal was over.

On his last day in office, admitting that he had liedin sworn testimony, Clinton agreed to a $25,000 fine anda five-year suspension of his law license. In March 2002the special counsel who had succeeded Kenneth Starr inthe original Whitewater inquiry found insufficient evi-dence to convict the Clintons of criminal behavior. TheNew York Times offered a final assessment:

The nation may never again see a president withBill Clinton’s natural political talents, his instinctivegrasp of policy and his breadth of understanding ofgovernment issues. He was capable of being anextraordinary leader. The fact that he turned out tobe so much less is a tragedy, and the tragedy’s firstact was Whitewater.

While escaping removal, Clinton had suffered griev-ous damage, mostly self-inflicted. His character flaws,whose consequences he had managed to avoid in acharmed political life, had overtaken him at last, erodinghis leadership and tarnishing his historical standing.The Republican party suffered as well, as some of itsmost extreme and moralistic members took centerstage, rubbing raw the partisan differences that threat-ened to fragment American public life.

CLINTON’S FOREIGN POLICY:DEFINING AMERICA’S

ROLE IN APOST-COLD WAR WORLD

Bill Clinton preferred domestic issues to foreign policy.Yet the United States, as the world’s only remainingsuperpower, could not escape its global role. Con-fronting scandal and partisan sniping a home, Clintonturned his attention abroad. He faced two key chal-lenges: using American power wisely in the post-ColdWar era and responding to terrorist acts against theUnited States and the threat of further attacks.

The Balkans, Russia, and EasternEurope in the Post-Soviet Era

In the region of southeastern Europe known as theBalkans, the Soviet collapse unleashed bitter ethnic con-flicts. As Yugoslavia broke apart in 1991, Serbian forceslaunched a campaign of “ethnic cleansing” in neighbor-ing Bosnia, which meant supporting Bosnia’s ethnicSerbs while slaughtering or driving out Muslims andCroats. Incited by Serbia’s president Slobodan Milosevic,Serbian troops overran U.N.-designated “safe havens”and committed brutal atrocities against Muslims.

To stop the slaughter, the United Nations intro-duced a peacekeeping force. When this effort failed, theNATO command in Europe, in its first joint militaryoperation, launched air strikes against Bosnian Serb tar-gets in August 1995. The Clinton administration reluc-tantly joined this operation.

Later in 1995 the administration flew the leaders ofBosnia’s warring factions to Dayton, Ohio, for talks. Theresulting Dayton Accords imposed a cease-fire and cre-ated a framework for governing the region. Clinton com-mitted twenty thousand U.S. troops to a NATO force inBosnia to enforce the cease-fire.

In 1998, Slobodan Milosevic launched a campaignagainst Muslims in Serbia’s southern province Kosovo. InMarch 1999, as the bloodshed continued, NATO, underU.S. leadership, bombed Serbian facilities in Kosovo and

Clinton’s Foreign Policy: Defining America’s Role in a Post-Cold War World 997

in Serbia itself, including Belgrade, the capital. Thisreliance on air power, with minimal risk of U.S. casual-ties, soon emerged as America’s preferred form of mili-tary engagement.

President Clinton, eager to avoid U.S. losses andhaunted by memories of Vietnam, held back from com-mitting ground forces. American public opinionwavered as well, appalled by the suffering and a growingrefugee crisis, but wary of expanding U.S. involvement.In June 1999, however, U.S. troops joined a NATO forcethat occupied Kosovo. With the Serbian army under con-trol, the refugees trickled back. Slobodan Milosevic wasoverthrown in 2001, and a more democratic Yugoslavgovernment, eager for Western aid, delivered him fortrial before a war-crimes tribunal at the Hague.

These developments affected U.S. relations with itsformer Cold War opponent, Russia. Although Russiaprotested the air attacks on its traditional ally, Serbia,Russian forces joined in NATO’s occupation of Kosovo.Facing unrest among its own Muslim population, Russiain 1995–1996 waged war against the breakaway Muslimrepublic of Chechnya. Some called this unpopular andinconclusive conflict Russia’s Vietnam.

Amid these troubles, Russia’s hasty conversion to afree-market economy caused a severe economic crisisthat threatened to topple President Boris Yeltsin. Havingput together a multi-billion-dollar loan package forRussia, the Clinton administration watched anxiously as chaos threatened. Despite U.S. disapproval of theChechnya war, and despite Yeltsin’s growing unpopular-ity and periodic alcoholic binges, Clinton continued tosupport him as Russia’s best hope. In 1999 the adminis-

tration backed Russia’s admission to the Group of Seven(G-7), the world’s leading industrial nations, and the G-7became the G-8. In the same year, over Russia’s protests,NATO admitted three new members from the formerSoviet bloc—Hungary, Poland, and the Czech Republic.Yeltsin resigned in December 1999, transferring powerto Vladimir Putin, a former agent of the KGB, the Sovietsecret police.

Symbolic Gestures in Africa; a Modest Success in Haiti

Clinton was stirred by conditions in Africa, a continentwracked by poverty, AIDS (see Chapter 31), tribal conflict,and authoritarian regimes. His engagement, however,proved mainly symbolic.

In 1992 in the East African nation of Somalia, afflict-ed by civil war and famine, President Bush had commit-ted some twenty-six thousand U.S. troops to a U.N. mis-sion to provide humanitarian aid and end the fighting. Asthe warring factions battled, forty-four Americans werekilled and many injured. President Clinton withdrew theU.S. force in 1994, and the U.N. mission ended a yearlater. Traumatized by this fiasco, Clinton failed to inter-vene in other African conflicts, including an appallinghuman tragedy in Rwanda, where as many as half a mil-lion people died and thousands more became refugeesin intertribal massacres.

During Clinton’s presidency South Africa endedapartheid and became a multiracial democracy—atransformation hastened by U.S. and other nations’ eco-nomic sanctions. In 1994 Nelson Mandela, long impris-



MAP 32.1The Mideast Crisis, 1980-PresentWith terrorist attacks, the Iran-Iraq War, the Persian Gulf War, Iraq’ssecretive weapons program, and the ongoing struggle between Israeland the Palestinians, the Middle East was the site of almost unendingviolence, conflict, and tension in these years.

Gaza Strip

Golan Heights

WestBank

SuezCanal

Dead Sea

Nile

R.

Jord

anR

.

MEDITERRANEAN SEA

BLACK SEA

RE

DS

EA

CASPIANSE

APersian Gul f

ARABIANSEA

IRAN

AFGHANISTAN

PAKISTAN

TURKEY

U.S.S.R.(RUSSIA)

IRAQ

SAUDI ARABIA

EGYPTLIBYA

U.S. bombing raid,April 1986.

ITALY

GREECE

SYRIA

JORDAN

ISRAEL

LEBANON

0 500 Miles

0 500 Kilometers

SUDANYEMEN

OMAN

Area of middle map

Area of bottom map

Final Israeli with-drawal from SinaiPeninsula, 1982.

Cairo

E G Y P T

AmmanJerusalem

ISRAELFirst Intifada begins,1987; Second Intifada,Palestinian suicidebombings begin, 2000.

Israeli invasion to driveout PLO, June 1982.

Assassination of YitzhakRabin, 1995.

Beirut

Terrorist bomb kills 239 U.S.and 58 French troops, Oct. 1983.

Shiite Muslim terroristshold American hostages,1984 –1994.

LEBANON

Damascus

SYRIA

JORDANSAUDI

ARABIA

CYPRUS

Incorporated unilaterallyby Israel, 1981

Occupied by Israel, 1967

0 100 Miles

0 100 Kilometers

Jordan turns overWest Bank responsibilitiesto PLO, July 1988.

Oct. 1981.Anwar el-Sadat,Assassination of

Israeli-Jordanianpeace treaty, 2000.

Israeli army reoccupiesWest Bank cities, 2002.

AFGHANISTANTehran

I R A N

BAHRAIN

QATAR

Persian Gulf

UNITED ARABEMIRATES

OMAN

SAUDIARABIA

I R A Q

0 200 Miles

0 200 Kilometers

CASPIANSEA

Iran-Iraq War,

Iraq invadesKuwait, 1990.

New governmentformed, 2002.

Persian GulfWar, 1991.

1980-1988.

Baghdad

Terrorists bomb U.S.military camp, 1995.

Terrorists bombU.S.S. Cole, 2000.

KUWAIT

U.S. and allies overthrowTaliban regime and attackAl Qaeda forces, 2001.

“No-fly zones”imposed on Iraq,1991, 1996.

oned by South Africa’s white government, was electedpresident. On a whirlwind tour of Africa in 1998,President Clinton visited South Africa and greetedMandela. Calling upon six nations in eleven days, heoffered modest aid assistance.

Closer to home, in Haiti, a 1991 military junta over-threw President Jean-Bertrand Aristide and terrorizedhis supporters. Thousands of Haitians fleeing povertyand repression set out for Florida in small, leaky boats.African-American leaders demanded U.S. action, as didHaitian’s born in the United States. To dislodge the junta,Clinton assembled an invasion flotilla off Haiti’s coast in1994, and former president Jimmy Carter persuaded thejunta’s leaders to accept voluntary exile. Backed by a U.S.occupation force, Aristide resumed the presidency, giv-ing Clinton a modest diplomatic success.

The Middle East: Seeking an ElusivePeace, Combating a Wily Foe

After hopeful beginnings, Clinton’s pursuit of peace inthe Middle East failed. The 1987 Palestinian uprising, orIntifada, against Israel’s military occupation of the WestBank and Gaza (see Chapter 30) continued into the1990s. Prospects for peace brightened in 1993, afterIsraeli and Palestinian negotiators meeting in Norwayagreed on a six-year timetable for peace.

The so-called Oslo Accords provided for the creationof a Palestinian state, the return of most Israeli-held land in the West Bank and Gaza to the Palestinians, andfurther talks on the claims of Palestinian refugees andthe final status of Jerusalem (see Map 32.1). In 1994President Clinton presided as Israeli prime ministerYitzhak Rabin and Yasir Arafat, head of the PalestineLiberation Organization, signed the agreement at theWhite House.

The bloodshed continued, however, and in 1995Rabin was assassinated by a young Israeli opposed tothe Oslo Accords. Israel’s next election broughtBenjamin Netanyahu of the hard-line Likud party topower. Suicide bombings by Palestinian extremists in1996–1997 killed some eighty Israelis, triggering retalia-tory attacks. Under U.S. pressure Netanyahu in 1998

agreed to withdraw Israeli forces from some West Bankareas in 1998 in return for security guarantees. But asterrorist attacks continued, Netanyahu halted the with-drawal. More Jewish housing was built in Palestinian ter-ritory, and by 2000 an estimated two hundred thousandIsraeli settlers were living there. Secretary of StateMadeleine K. Albright struggled to bring the two sidesback to the negotiating table. (Albright was named to thepost in 1997, thereby becoming the highest-rankingwoman in U.S. government history.)

Ehud Barak of Israel’s more moderate Labour partybecame prime minister in 1999. In July 2000 Clintoninvited Barak and Arafat to meet at Camp David. Barakmade unprecedented concessions based on the princi-ple of “land for peace.” According to press reports, heagreed to Israeli withdrawal from 95 percent of the WestBank and all of Gaza; the creation of a Palestinian state;Palestinian control of East Jerusalem; and the transfer ofcontrol over Jerusalem’s Temple Mount, sacred to bothMuslims and Jews, from Israel to a vaguely defined “reli-gious authority.” In return, Arafat would declare an endto hostilities and give up further claims on Israel.

Arafat refused Barak’s offer, and the summit failed.In September the Likud leader Ariel Sharon—with nearlyone thousand Israeli soldiers and police—made aprovocative visit to the site of Al-Asqa Mosque, anIslamic shrine on Temple Mount. Soon after, Pales-tinians launched a new Intifada against Israel. Clintoncontinued last-ditch peacemaking efforts, but theycame to nothing. In elections early in 2001, Ariel Sharonbecame prime minister. Like other presidents beforehim, Clinton bequeathed the Israeli-Palestinian conflictto his successor.

Elsewhere in the Middle East, a renewed crisis inIraq demanded Clinton’s attention. After the PersianGulf War, the United Nations had imposed trade sanc-tions on Iraq and set up an inspection system to preventSaddam Hussein from building weapons of massdestruction. Late in 1997, when Saddam refused U.N.inspectors access to certain sites, Clinton dispatchedships, bombers, missiles, and thirty thousand troops tothe Persian Gulf. He sought to rally support for a militarystrike, as George Bush had done in 1991, but France,Russia, and various Arab states resisted. At home, criticsquestioned whether bombing would further the goal ofunrestricted inspections.

Clinton drew back from military action after the newU.N. secretary general, Kofi Annan of Ghana, securedSaddam’s agreement to open inspection. Saddam soonreneged, and the crisis continued. The Iraqi muddle under-scored the difficulty of using U.S. military might to combat

potential terrorist threats, and of rallying post-Vietnam U.S.public opinion behind a military course whose long-termoutcome seemed murky.

Nuclear Proliferation and Terrorism:Confronting Global SecurityChallenges

Under the Nuclear Nonproliferation Treaty of 1970,sixty-two nations agreed to ban the spread of nuclearweapons beyond countries that already possessed them.Despite this treaty, the proliferation threat continued. InMay 1998 a long-simmering dispute between India andPakistan over Kashmir escalated sharply when Indiatested a nuclear bomb. Despite urgent pleas from theUnited States and other powers, Pakistan followed suit,and fears of nuclear conflict rose.

Proliferation fears also focused on communistNorth Korea, which, in violation of the 1970 treaty, begana program of nuclear-weapons development and missiletesting. In 1994, facing U.N. economic sanctions and theloss of $9 billion in international assistance (and follow-ing a visit by Jimmy Carter), North Korea pledged to haltthis program. In 1999, confronting famine and econom-ic crisis, North Korea agreed to suspend long-range mis-sile testing in return for an easing of U.S. trade and trav-el restrictions. In 2002, triggering fresh tensions, NorthKorea admitted to continued nuclear weapons research.

Nuclear dangers also arose in the former SovietUnion. In the 1993 Strategic Arms Reduction Treaty(START II), the United States and Russia agreed to cuttheir long-range nuclear arsenals by half. This left manynuclear weapons in Russia and in three newly independ-ent nations that had once been part of the Soviet Union:Ukraine, Kazakstan, and Belarus. With social unrest andeconomic crisis in the region, Washington feared thatforeign powers or terrorist groups might acquire nuclearweapons or know-how through clandestine operationsor bribery. The Bush and Clinton administrationsexpended much money and diplomatic effort to speedthe “denuclearization” of Ukraine, Kazakstan, andBelarus, and the safe dismantling of nuclear weaponswithin Russia itself.

The cycle of terrorism continued in the Clintonyears. On August 7, 1998, powerful bombs explodedalmost simultaneously outside the U.S. embassies inNairobi, Kenya, and Dar-es-Salaam, Tanzania, killing220 people, including Americans and many Kenyans andTanzanians. U.S. antiterrorism specialists pinpointed ashadowy and wealthy Saudi Arabian, Osama bin Laden,who in 1982 had moved to Afghanistan, where he


established and financed terrorist training camps. In the1990s he had spent time in Sudan.

Two weeks after the embassy bombings, Clintonordered cruise missile strikes on a suspected chemical-weapons factory in Sudan allegedly financed by binLaden and on a training camp in Afghanistan. InNovember 1998 a U.S. grand jury indicted bin Laden oncharges of planning the embassy attacks and also ofinciting the killing of GIs in Somalia in 1993.

In 1999 Clinton called for increased spending andnew measures to cope with rogue states and terroristgroups that might acquire nuclear, chemical, or biologi-cal weapons. “[W]e are involved here in a long-termstruggle . . . ,” declared Secretary of State Albright; “Thisis, unfortunately, the war of the future.”

Underscoring Albright’s grim assessment, onOctober 12, 2000, a bomb aboard a small boat in the har-bor of Aden, Yemen, ripped a gaping hole in the U.S.destroyer Cole, killing seventeen sailors. At a memorialservice, President Clinton told the grieving families,“[Terrorists] . . . can never heal, or build harmony, orbring people together. That is work only free, law-abiding people can do. People like the sailors of the USSCole.” The peaceful post-Cold War era that many hadanticipated seemed an ever-receding mirage.

A New World Order?

As we saw in Chapter 31, the end of the Cold War initiallybrought a wave of joy and relief. But as time passed, itbecame clear that world conditions remained danger-ous and posed challenges as daunting as those of theCold War itself. The Soviet empire had collapsed, and thethreat of global nuclear war had subsided, but troublespots around the world still clamored for attention. Likefirefighters battling many small blazes rather than a sin-gle conflagration, policymakers now wrestled with a tan-gle of seemingly unrelated issues. Somalia, Bosnia, Iraq,Kosovo, North Korea, Pakistan, Afghanistan, Israel andthe Palestinians, and terrorists who ignored nationalboundaries all claimed Washington’s attention.

At the same time, many citizens turned away fromworld affairs. In a 1997 poll only 20 percent of Americanssaid that they followed foreign news, a sharp declinefrom the 1980s, with the biggest drop among young peo-ple. TV coverage of world news fell by more than 50 per-cent from 1989 to 1995. Post-Cold War America, com-mented one observer in 1998, “has no mission otherthan to keep itself entertained.”

Taking a broad view, four large-scale developmentshelped define America’s post-Cold War global role. The

first was the growing centrality of economic and tradeissues. Commercial considerations, multinational cor-porations, and global systems of communications,finance, and marketing increasingly defined interna-tional relations and America’s foreign-policy interests.

Second, in contrast to economic globalization, theworld saw a turning inward toward various forms of reli-gious fundamentalism. Muslim fundamentalists, react-ing against Western secularism, searched for Islamicpurity, in some cases concluding that terrorist attacks onAmerica, which they viewed as demonic and threatening,represented a religious duty. In Israel, some OrthodoxJews claimed Palestinian lands on the basis of biblicalprophecies. In India, a fundamentalist Hindu partygained power in 1998, replacing the secularist Congressparty. America harbored Christian fundamentalists sus-picious of international organizations and of the U.S.government itself and dismayed by an array of social andcultural trends. The struggle between fundamentalist andinward-turning impulses, on the one hand, and the glob-alizing economy and communications system, on theother, posed a major challenge for diplomats.

Third, a growing gulf divided the world betweenprosperous, industrialized societies with high livingstandards and stable birthrates, and regions scourged bypoverty, disease, illiteracy, explosive population growth,and a dangerous gap between the masses and privilegedelites. This vast disparity created conditions ripe for con-flict and unrest, including the spreading menace of ter-rorism.

Finally, the role of international organizations wasuncertain. With the Cold War’s end, some Americanseither turned to isolationism or favored unilateralist, go-it-alone approaches. Some Americans even demandedU.S. withdrawal from the United Nations and otherworld organizations.

Others, however, continued to hope that the UnitedNations, long a pawn of the superpowers’ conflict, couldat last function as its more idealistic supporters hadenvisioned in 1945. Indeed, in 2002 some forty-fourthousand U.N. peacekeeping forces and civilian per-sonal were serving in fifteen trouble spots around theworld. U.N. agencies also addressed global environmen-tal and public-health issues.

Post-Cold War opinion polls indicated that mostAmericans supported internationalist approaches toworld problems and viewed the United Nations favor-ably. Despite flagging attention to foreign affairs,Americans could become engaged when they under-stood an issue in human terms, or grasped how eventsabroad affected U.S. interests. Clearly, however, Amer-


icans of the 1990s were still adjusting to a new era ofcomplex international issues that could not be reducedto simple Cold War slogans.

THE ECONOMIC BOOMOF THE 1990S

The 1990s saw one of the longest periods of sustainedeconomic growth in U.S. history. Productivity increased,unemployment fell, and inflation remained under con-trol. Prosperity helped bring crime rates down andreduce welfare rolls. Federal deficits gave way to sur-pluses as tax revenues increased.

For some, the surging stock market stimulated theurge to get rich quick, acquire more possessions, andenjoy the good times. But real wages did not keep pacewith the stock market, and many workers who lackedthe specialized skills required by the new economyremained stuck in dead-end jobs. America’s participa-tion in an increasingly global economy fueled economicgrowth, but when foreign economies faltered, the U.S.economy felt the effects as well.

Economic Upturn; Surging Stock Market

Although Bill Clinton targeted the sluggish economy inthe 1992 campaign, a turnaround had already begun.Economists differ over the sources of the prosperity ofthe 1990s, but the new products, efficiencies, and busi-ness opportunities associated with the personal com-puter and the information revolution were certainly cru-cial (see Chapter 31). Rising international trade and highconsumer confidence helped sustain the boom, as didlow inflation, the Federal Reserve Board’s low interestrates, and a steady flow of immigrants eager to work.

Whatever its sources, the fact of the boom is clear.Unemployment, which stood at 7.5 percent in 1992, fellto 4 percent by 2000. Corporate earnings soared. Wal-Mart racked up revenues of $193 billion in 2000; GeneralMotors, $185 billion; and on down the list. The Houston-based Enron Corporation, an energy broker, vaulted intothe ranks of corporate giants, reporting revenues of $101billion. The gross domestic product, a key economicindicator, rose nearly 80 percent in the decade (seeFigure 32.1).

The stock market reflected and then outran the eco-nomic upturn as the stock of many companies soaredfar beyond their actual value or earnings prospects.From under 3,000 in 1991, the Dow Jones IndustrialAverage edged toward 12,000 by early 2001. New investorsflocked into the market. By 1998 nearly 50 percent ofAmerican families owned stock directly or through theirpension plans.

Information-technology stocks proved especiallypopular. The NASDAQ composite index, loaded withtechnology stocks, soared from under 500 in 1991 toover 5,000 by early 2000. Some new stock offerings bySilicon Valley start-up companies surged to fantasticlevels, turning young entrepreneurs into paper million-aires. The brokers who managed these offerings (andprofited from the rising stock prices) fueled the specu-lation with glowing assessments of new companies’earning prospects. As early as 1996 Alan Greenspan,chairman of the Federal Reserve Board, warned of “irra-tional exuberance” in the stock market, but it onlysurged higher.

Corporate mergers proliferated as companiessought to improve their profitability. In 2000 the com-munications giant Viacom swallowed CBS for $41 bil-lion, and the pharmaceutical company Pfizer acquiredrival Warner-Lambert for $90 billion. In the biggestmerger of all, the Internet company America Online(AOL) acquired Time-Warner (itself the product of earli-er mergers) for $182 billion.


The rising stock market made many Americanswealthy, at least on paper, stimulating the quest for luxu-ry possessions and leisure pursuits that helped shapethe cultural climate of the decade (see Chapter 31). In2000 Americans spent $105 billion on new cars; $107 bil-lion on video, audio, and computer equipment; and $81billion on foreign travel. The so-called dot-com million-aires of Silicon Valley and Wall Street seemed living proof that the new economy was the wave of the future.Some economists waved caution flags. With so manyAmericans speculating in stocks rather than puttingmoney in more secure forms of savings, they warned, theinevitable downturn could have severe consequences.

An Uneven Prosperity

The benefits of the boom were unevenly distributed.From 1979 to 1996 the portion of total income going tothe wealthiest 20 percent of the population increased by13 percent, while the share going to the poorest 20 per-cent dropped by 22 percent. Commented Harvard econ-omist Richard Freeman in 1998, “The U.S. has the mostunequal distribution of income among advanced coun-tries—and the degree of inequality has increased more

here than in any comparable country.” While stockhold-ing was widely diffused by the later 1990s, the top 5 per-cent of the owners held 80 percent of all stock.

As corporations maintained profits through “down-sizing” and cost cutting, job worries gnawed at manyAmericans. Adjusted for inflation, the real wages ofindustrial workers rose only slightly in the 1990s. Therapidly growing service sector included not only high-income positions but also low-paying, low-skilled jobsin sales, fast-food outlets, custodial work, telemarketing,and so forth (see Chapter 31). While many service work-ers as well as teachers and other white-collar groupswere unionized, overall union membership stood at only13.5 percent of the labor force by 2000, weakening thismeans by which workers had historically organized toimprove their wages and job conditions. Unions’ politi-cal clout weakened as well. Congress ratified the 1993NAFTA treaty, for example, despite protests from organ-ized labor (see Chapter 31).

Job-market success increasingly required advancedtraining and special skills, posing problems for youngpeople, displaced industrial workers, and welfare recipi-ents thrown into the labor force. Overall employmentstatistics also concealed racial and ethnic variables. In

The Economic Boom of the 1990s 1003

1

2

3

4

5

6

7

8

9

10

Unemployment Rate, 1990-2002

2002*1990 1992 1994 1996 1998 2000

Per

cen

tag

e o

f ci

vilia

n la

bo

r fo

rce

un

emp

loye

d

*As of October 2002 (5.7 percent)

FIGURE 32.1The U.S. Economy, 1990–2002The unemployment rate fell and the gross domestic product (GDP) rose during the boom years of the 1990s.As recession hit in 2001, however, the jobless rate increased.

1,000

2,000

3,000

4,000

6,000

7,000

8,000

9,000

5,000

10,000

2002*1990 1992 1994 1996 20001998

Bill

on

s o

f d

olla

rs

*Annual estimate based on First Quarter figures

Gross Domestic Product, 1990-2002

2000 the jobless rate for blacks and Hispanics, despitehaving dropped, remained significantly higher than therate for whites. In short, while the economic boombrought real benefits to many, a wide gap existed betweenthose who prospered dramatically, and those who experi-enced only modest gains, or none at all.

America and the Global Economy

As the NAFTA agreement made plain, expanding foreigntrade ranked high on Clinton’s agenda. At the 1994 meet-ing of the G-7, Clinton declared, “Trade as much astroops will . . . define the ties that bind nations in thetwenty-first century.” When the U.S. trade deficit shot upto $133 billion in 1993, after several years of decline, andincluded a $59 billion trade gap with Japan, Clinton likehis predecessor pressured the Japanese to buy more U.S.goods.

Clinton also opted to preserve trading ties withChina despite Beijing’s human-rights abuses. Brushingaside protests from human-rights activists, Clinton wel-comed Chinese president Jiang Zemin for a state visit in1997, and returned the visit in 1998. Congress grew skep-tical of the administration’s policy of “constructiveengagement” with China as Beijing continued perpe-trating human-rights abuses, pursuing restrictive tradepractices, threatening Taiwan, and pirating U.S. movies,CDs, and computer software.

Clinton’s China policy reflected hard economic real-ities: China had become America’s fourth largest tradingpartner, after Canada, Mexico, and Japan. In 2000Congress passed legislation that permanently grantedChina the same trading status as America’s other tradingpartners, rather than making trade agreements withChina dependent on year-by-year congressional action,as in the past. That year U.S. imports from China sur-passed $100 billion.

Economic calculations also increasingly definedU.S. relations with Europe, which became a powerfultrading competitor in 1993 when fifteen nations createdthe European Union (EU), pledged to coordinating theireconomic policies. Furthering this policy of economiccooperation, in 2001 the EU nations adopted a commoncurrency, the Euro.

The growing importance of world trade was under-scored in 1994 when the Senate ratified a new globaltrading agreement that created the World Trade Orga-nization (WTO) replacing the old General Agreement on Tariffs and Trade (GATT) established in 1947 (seeChapter 26). The WTO agreement provided for a gradual

lowering of trade barriers worldwide and set up mecha-nisms for resolving trade disputes.

The interconnectedness of the global economybecame evident in the 1990s. When the Mexican pesocollapsed in 1995, jeopardizing U.S.-Mexican trade andthreatening to increase the flow of illegal migrantsnorthward, Clinton quickly granted Mexico $40 billionin loan guarantees. In 1997–1998 the economies ofThailand, South Korea, Indonesia, and other Asiannations weakened as a result of corruption, excessivedebt, and other factors. Viewing the crisis as a danger tothe United States, the State Department worked to avoidpolitical chaos and regional instability.

Political and social chaos especially threatenedIndonesia, the world’s fourth-most-populous nation, ruleduntil 1998 by the aging and autocratic President Suharto.Working through the International Monetary Fund, theU.S. administration sought to bail out Indonesia’s falteringeconomy and to reduce corruption in the regime.

The once-sizzling Japanese economy stumbled asAsia’s economic crisis spread. Japan’s banks faltered; theTokyo stock market fell; and the yen lost value, unset-tling the U.S. stock market and further jeopardizing U.S.exports and investments in Asia. Again recognizing thethreat to U.S. prosperity, the Clinton administrationurged Japan to undertake needed economic reforms. By1999, as the economies of Brazil, Argentina, and otherSouth American nations sank into recession as well,analysts questioned how long the American boom couldcontinue.

In the new global economy, European and otherinvestors flocked into the American market. By 2000foreign investment in the United States totaled a stag-gering $1.24 trillion. Australian-born tycoon RupertMurdoch snapped up U.S. entertainment and commu-nications companies. Investment flowed the other wayas well. As American fast-food chains, soft drinks,movies, pop music, and TV programs spread globally,other nations fretted about being swamped by U.S.mass culture.

Globalization aroused opposition in other quartersas well. Union leaders and environmentalists warnedthat multinational corporations could bypass nationalenvironmental-protection laws and exploit unprotectedworkers in poor nations. Activists pressured companiesselling clothing, footwear, and other consumer goodsmade in poor nations to upgrade labor conditions intheir factories. At a 1999 WTO conference in Seattle,opposition exploded in the streets. For several days,demonstrators representing a variety of causes nearlyshut down the city.


DISPUTED ELECTION;CONSERVATIVE

ADMINISTRATION,2000–2002

The 2000 election highlighted the acrimony pervadingU.S. politics. The disputed election ended the Dem-ocrats’ hold on the White House, but only after theSupreme Court intervened on behalf of the Republicancandidate, George W. Bush. Pursuing his father’s unful-filled agenda, Bush advocated policies supported by cor-porate America and by religious conservatives. On themilitary front, Bush pursued a missile-defense systemfirst proposed by Ronald Reagan. In its approach to theworld, the administration initially followed a go-it-alonepolicy, arousing widespread criticism abroad.

Election 2000: Bush Versus Gore

The 2000 campaign shaped up as a contest of personali-ties more than issues. The Democrats, bouncing backfrom the impeachment crisis, confidently nominated AlGore for president. As his running mate, Gore choseConnecticut Senator Joseph Lieberman, making him thefirst Jewish-American candidate on a major party ticket.The fact that Lieberman had denounced Clinton’s extra-marital affair and his efforts to cover up the scandalhelped insulate Gore from the “sleaze factor” in theClinton legacy.

The Republican contest narrowed down to SenatorJohn McCain of Arizona, a former prisoner of war inVietnam, and Texas Governor George W. Bush, son of theformer president. The maverick McCain, a champion ofcampaign-finance reform and a critic of corporate influ-ences in his party, made a strong bid. Bush, however,with powerful backers and a folksy manner, won thenomination. His running mate Dick Cheney had beendefense secretary in the first Bush administration andthen head of the Halliburton Corporation, a Dallas-based energy company. Conservative columnist PatBuchanan won the nomination of Ross Perot’s Reformparty. The Green party nominated consumer advocateand environmentalist Ralph Nader.

Both Gore and Bush courted the center while tryingto hold their bases. For Bush, this meant corporate inter-ests, religious conservatives, and the so-called ReaganDemocrats in the white middle and working classes.Gore’s base, by contrast, consisted of liberals, academicsand professionals, union members, African-Americans,and many Hispanics.

With the economy still healthy (despite signs ofweakening), Gore’s prospects looked good. He pointedto the nation’s prosperity and pledged to extend healthcare coverage and protect social security. In televiseddebates Gore displayed greater mastery of detail thanhis opponent.

Bush, by contrast, while projecting a likeable man-ner, had little national or foreign-policy experience.Many saw him as a lightweight who owed his politicalsuccess to family influence. As one Texas Democratquipped, “George Bush was born on third base andthought he had hit a home run.” But he campaignedhard, pledging tax cuts, education reform, and a missile-defense system. Calling himself a “compassionate con-servative,” Bush subtly reminded voters of Clinton’s mis-deeds by promising to restore dignity to the WhiteHouse.

Gore had image problems. He had been tainted byfund-raising scandals in the 1996 campaign, and manyvoters found him pompous. The factual mastery heflaunted in the debates struck many as arrogant. Eagerto prove his political independence after eight years asvice president, Gore distanced himself from Clinton,despite the president’s high approval ratings. Peeved,Clinton played little role in the campaign.

Polls showed that most voters agreed with Gore onthe issues, approved the Democrats’ economic policies,

Disputed Election; Conservative Administration, 2000–2002 1005

and conceded Gore’s intellectual edge. Ominously forGore, however, they preferred Bush as a person. Theelection seemed a toss-up.

Feuding in Florida

The intensely partisan politics of these years, so vividlyon display in the impeachment crisis, was further sym-bolized by a bitter dispute over the election outcome(see Map 32.2). When the polls closed on November 7,Gore had won the popular vote by a narrow but clearmargin of more than 500,000. The electoral college, how-ever, remained up for grabs. Soon the struggle narrowedto Florida, whose 25 electoral votes would give eithercandidate the presidency.

Flaws in Florida’s electoral process quickly becameapparent. In Palm Beach County, a poorly designed bal-lot led several thousand Gore supporters to vote forBuchanan by mistake. In other counties, particularlythose with a high proportion of poor and African-American voters, antiquated vote-counting machinesthrew out thousands of ballots in which the paper tabs,called “chads,” were not fully punched out. Gore sup-porters demanded a hand count of these rejected bal-

lots, confident that they would carry their man to victo-ry. Bush’s lawyers filed suit to halt the recounts.

Florida secretary of state Katherine Harris refused toextend the deadline for certifying the Florida vote toallow for a hand recount. Democrats questioned Harris’simpartiality, since she had cochaired Bush’s Floridacampaign and was an ally of Florida Governor Jeb Bush,the candidate’s brother.

As various counties conducted hand counts, elec-tion officials scrutinized ballots to see whether the chads were detached, dangling, or “pregnant” (partiallypushed out). On November 21 the Florida SupremeCourt, with a preponderance of Democrats, unanimous-ly held that the hand count should constitute the officialresults. Bush’s legal team appealed to the U.S. SupremeCourt, which, despite a well-established precedent ofletting state courts decide electoral disputes, acceptedthe case. Overturning the Florida justices’ ruling, theU.S. Supreme Court on December 4 sent the case backto Tallahassee for clarification. The seemingly endlessdispute dominated the media.

Meanwhile, on November 26, Secretary of StateHarris had formally certified the Florida vote, awardingBush the state. But on December 8, ten days before the


RepublicanGeorge W. Bush

DemocraticAlbert Gore, Jr.

271

267

50,456,169

50,996,116

47.9

48.4

Electoralvote

Popularvote

Percentage ofpopular vote

4

3

11

7

54

4

4

3 3

3

5

5

4

34 12

23

33

6

8

32

10

7

11

6

9

7 9 13

25

8

14

13

11

8

1222

1118

21

3

58

58

Alaska

Hawaii

3 Washington, D.C.

Green Ralph Nader

— 2,783,728 2.7—

10

15

3

48

MAP 32.2The Election of 2000.For the first time since 1888, the winner of the popular vote, Al Gore,failed to win the presidency. The electoral-college system and theSupreme Court’s intervention in the disputed Florida vote put George W.Bush in the White House.

electoral college was to convene, the Florida SupremeCourt ordered an immediate recount of all ballotsthrown out by voting machines. “At this rate,” mused aradio commentator, “the Inaugural Ball will be a surpriseparty.” The U.S. Supreme Court again heard an appeal,and on December 12, in a 5 to 4 vote, ordered an end tothe recount. Republican appointees to the court gener-ally supported Bush. Gore conceded the next day. FiveSupreme Court justices had, in effect, made George W.Bush president.

Ralph Nader who, though winning only 3 percent ofthe vote, also helped put Bush in the White House. Had itnot been for the 97,488 Floridian’s who voted for Nader,Gore would doubtless have won the state.

The election produced an evenly divided Senate.Each party had fifty senators, giving Vice PresidentCheney the deciding vote. (The Republicans narrowlyheld the House of Representative.) Hillary RodhamClinton won election as senator from New York, becom-ing the first presidential wife to pursue a political career.Overall, the new Senate included thirteen women, arecord number.

To the end, President Clinton maintained the samebalance of statesmanlike and shady behavior thatbedeviled his entire presidency. In January 2001, as histerm ended, Clinton issued tougher worker-safety regu-lations, particularly relating to repetitive-motion injuriescommon among computer workers. He also issued anexecutive order protecting nearly 67 million acres of fed-eral forest land from logging and road building.

On his last day in office, however, he issued federalpardons to 167 people, including his half-brother, introuble with the law on drug charges; persons caught upin Clinton-era scandals; and white-collar offenders whohad White House influence or were major Democraticcontributors, including a commodities trader who hadfled to Switzerland to avoid trial for tax evasion andother crimes. Despite Clinton’s political skills and goodintentions, few Americans expressed regret as he leftWashington.

The George W. Bush Administration:A Conservative Turn in DomesticPolitics

As the election crisis ended, Americans focused on theincoming president, fifty-four-year-old George W. Bush.After graduating from Yale, serving in the Texas AirNational Guard during the Vietnam War, and earning anMBA from Harvard Business School, Bush returned toTexas and entered the oil business. Known for partying

and heavy drinking since his college days, he was con-victed of drunk driving in 1976, but then experienced areligious conversion and married a schoolteacher, LauraWelch, who helped bring stability to his life. Bush’s busi-ness ventures did not thrive, but in 1989 he joined a con-sortium that bought the Texas Rangers baseball team.Frequently appearing at games, he used this visibility,plus his family connections, to win the Texas governor-ship in 1994.

Attention soon focused on the team Bush assem-bled. Colin Powell, former head of the Joint Chiefs ofStaff, became secretary of state, and the highest rankingAfrican-American ever to serve in a presidential admin-istration. As national security adviser Bush namedCondoleezza Rice of Stanford University, also an African-American.

Other Bush appointees were, like Vice PresidentCheney, veterans of earlier Republican administrationswith strong corporate ties. Secretary of Defense DonaldRumsfeld had held the same post under President Fordand later headed a large pharmaceutical company.Treasury Secretary Paul O’Neill had been CEO of AlcoaCorporation. Army Secretary Thomas E. White camefrom Houston’s Enron Corporation. To appease theRepublican right wing, Bush named ultra-conservativeJohn Ashcroft, who had just lost a bid for reelection tothe Senate, as attorney general. After a stiff grilling,Ashcroft won confirmation on a 58 to 42 Senate vote.

Despite his razor-thin victory, Bush did not move tothe center, as many had expected. Rather he tailored hisdomestic policies to reflect the interests of the wealthy,corporate leaders, and the religious right. His own con-servative outlook and business background, combinedwith the influence of businesspeople in his inner circleand a desire to win favor with religious conservatives(whose alienation had helped defeat his father’s reelec-tion bid in 1992), shaped his administration.

On education, Bush proposed standardized nationaltests from grades three through eight, to make sure chil-dren were learning basic skills, with penalties on schoolsthat failed to measure up. He also called for a vouchersystem by which children could attend private or reli-gious schools at taxpayers’ expense. In December 2001Congress mandated annual testing and provided fundsfor tutors in poorly performing schools, but rejected thecontroversial voucher provision.

In February 2001, fulfilling a campaign promise, Bushproposed a bill to cut taxes by $1.6 trillion over a ten-yearperiod. Though the measure reduced rates in most taxbrackets, the wealthiest taxpayers benefited most.Proponents argued that the tax cuts would stimulate


investment as the economy went into recession (seebelow). Democrats attacked the bill for favoring the rich. Recalling the huge deficits that followed the Reagantax cut of 1981, they also charged that Bush’s plan reflect-ed overly optimistic economic projections. In MayCongress passed a $1.35 trillion tax cut—lower thanBush’s proposal and somewhat less tilted toward the rich.As the economy worsened and budget surplus-es vanished, second thoughts about Bush’s tax cutincreased. The New York Times, estimating the lost federalrevenue over a twenty-year period at a staggering $4 tril-lion, warned that the shortfall could be covered only bydipping into social security and Medicare trust funds.

Bush’s energy program reflected the industry’s influ-ence in Republican circles. Kenneth Lay, for example,head of Houston’s Enron Corporation and a major GOPcontributor, enjoyed access to top Bush administrationofficials and the heads of federal regulatory agencies.

Warning of America’s dependence on imported oil,Bush proposed two thousand new electric power plants,including more nuclear power plants, and vastly expandedcoal, oil, and natural-gas production, including miningand drilling in environmentally fragile regions such asthe Alaska National Wildlife Refuge. Conservation andresearch on renewable energy barely figured in the pro-gram. Critics attacked the administration’s ties to theenergy industry and the fact that the plan had beendrafted in closed meetings between Dick Cheney andenergy-company executives.

The Republican House passed a bill favored by theWhite House. It provided $27 billion in incentives for thedomestic oil, gas, and coal industries and permitteddrilling in Alaska’s Arctic National Wildlife Refuge. InApril 2002 the Democratic Senate passed a very differentbill featuring tax breaks and other incentives to promoteenergy conservation and the use of renewable fuels, andforbidding Alaska drilling. The two bills went to a jointHouse-Senate conference committee, with the final out-come uncertain. The process illustrated the difficultiesof governing in a climate of sharp partisan divisions,with each side holding sharply, opposed ideologicalpositions.

As Bush’s conservative program unfolded, moderateRepublicans grew restive. In May 2001, Vermont SenatorJames Jeffords announced his departure from theRepublican party to become an independent. WithJeffords’ vote, the Democrats regained the chairmanshipof all Senate committees and the opportunity to shapethe Senate agenda. The four-month interval when theWhite House and both houses of Congress were con-trolled by the same party came to an end, suggesting stillmore divisive political battles ahead.

Jeffords’ action, observed political commentatorFlora Lewis, offered “a sharp reminder that the votersdid not choose the clear swing to the right that GeorgeW. Bush seems to assume.”

The Democrats’ Senate takeover added momentumto a bill, opposed by the administration, to regulate


health maintenance organizations (HMOs) and broadenpatients’ right to choose specialists and to sue theirHMOs. With 80 percent of U.S. workers in HMOs, andwith rising complaints about paperwork, unpaid claims,and HMO decisions driven by cost rather than bypatients’ well-being, such legislation enjoyed broad sup-port. In August 2001 both houses passed so-calledpatients’ bill of rights bills, though they differed on thepermissible size of lawsuits and other provisions.

The battle illustrated the power of pressure groupsand soft money. In what one Washington observer called“a lobbying war of near-epic proportions,” the HMOindustry, health insurers, and business associationsfought the bill, while consumer groups and the trial-lawyers association supported it. Whether such a law, iffinally enacted, would actually improve health care orreduce public frustration with an increasingly bureau-cratic and cost-conscious system remained unclear.

Bush’s attempt to placate the religious right withoutalienating less-conservative voters was illustrated by hiseffort to find a middle way on the emotional issue ofresearch on stem cells, which are produced during anearly stage of human embryo development (seeTechnology and Culture: The Promise and Dilemma ofGenetic Research). Biomedical specialists and manybioethicists argued that the potential medical benefitsjustified stem-cell research. Some religious organiza-tions as well as anti-abortion groups strongly protested,arguing that such research could lead down a slipperyslope of subordinating potential human life to scientificprojects. Bush’s compromise ruling, announced inAugust 2001, permitted federal funding of research onstem-cell lines already held by laboratories, but barringfunding for research on stem cells taken from embryosin the future.

A Go-it-Alone Foreign Policy;Pursuing Missile Defense

The administration of George W. Bush at first proceededwith scant regard for other nations’ views. This con-trasted with his father’s approach, which had been quite internationalist in outlook. On military matters,the younger Bush pursued programs initiated by hisRepublican predecessors.

Both these generalizations are illustrated by theadministration’s determination to build the antimissilesystem first proposed by President Reagan in 1983 (seeChapter 30). Reagan’s “Star Wars” initiative had been crit-icized as a technological fantasy, and its strategic ration-ale seemingly evaporated with the Cold War’s end.

Clinton had downgraded antimissile research, butGeorge W. Bush gave it high priority. True believers andmilitary contractors eager to promote the project arguedthat the technical problems could be solved. As for itsstrategic rationale, they now focused on possible missileattacks from “rogue states” such as Iraq and North Korea.

Bush’s enthusiasm for missile defense had diplo-matic implications, because such a system would violatethe 1972 Anti-Ballistic Missile (ABM) Treaty. Russianpresident Vladimir Putin, eager for U.S. investment anda greater role in NATO, agreed to discuss dropping theABM Treaty if both sides agreed to reduce their remain-ing arsenals of some six to seven thousand nuclearweapons. The Bush administration valued Russia as anally in the war against terrorism (see below) and as apotential supplier of oil should imports from the MiddleEast be disrupted, and accepted Putin’s terms. In 2002the United States withdrew from the ABM Treaty and itofficially lapsed. Soon after, Bush and Putin signed atreaty pledging to cut their nuclear arsenals by two-thirds within ten years. Fulfilling another of Moscow’sobjectives, NATO granted Russia a close consultativerelationship, though not full membership.

In June 2002 work began at Fort Greely, Alaska, on afacility for developing and testing a missile defense sys-tem, which planners hoped would be operational by2004. Alaskans who were worried about the state’s econ-omy welcomed the infusion of jobs and federal dollarsthe project promised.

Other U.S. actions underscored the administration’sgo-it-alone approach. At a 178-nation conference onglobal warming in Bonn, Germany, in 2001, the U.S. del-egation refused to participate in or sign the resultingagreement. When most other nations, including theEuropean Union and Japan, agreed to strengthen a 1972treaty banning biological weapons, the United Statesrefused to accept the plan. The administration alsorejected a U.N. agreement to regulate the global trade inhandguns, as well as a treaty banning discriminationagainst women ratified by 169 other nations.

The United Nations had long been a target of con-servatives skeptical of international commitments.Beginning in 1994, conservatives in Congress led byRepublican Jesse Helms of North Carolina had withheldpayment of America’s U.N. dues. By 2001 the back debttotaled $2.3 billion. Early in 2001 the Senate ForeignRelations Committee agreed to pay part of this sum and to resume payment of future dues at a reduced percentage rate. Even this agreement was jeopard-ized in 2002, however, when the Bush administrationopposed the creation of an International Criminal Court


The Promise and Dilemma of Genetic Research

TECHNOLOGY AND CULTURE

Quantum physics was the most exciting scientificand technological frontier in the early twentieth

century, as researchers made theoretical discoveries thatultimately gave rise to the atomic bomb, the nuclear-power industry, radiation therapy in cancer treatment,and the use of radioactive isotopes in medical diagnosis.After 1950, the biological sciences, especially molecularbiology and genetics, produced the most stunningbreakthroughs. But the same discoveries that deepenedunderstanding of life also raised complex social and eth-ical issues.

For centuries, farmers had understood genetic prin-ciples in practical terms as a way to increase crop yieldand breed fatter hogs and cows that produced more milk.Modern genetics dates back to the 1860s, when Austrianmonk Gregor Mendel experimented with hybridizing peaplants.

The field of molecular biology arose in the 1950s. In1953 Max Perutz of Cambridge University showed howx-rays could be used to establish the structure of proteinmolecules, the basic working elements of all living organ-isms. Modern genetics leapt forward in 1953–1954 whena young American scientist, James D. Watson, workingwith Francis Crick of Cambridge University and usingdata from Maurice Wilkins and Rosalind Franklin of King’sCollege, London, established the double-helix structureof DNA (deoxyribonucleic acid), a mega-molecule essen-tial in the transmission of genetic information. For theirachievements, Perutz, Kendrew, Watson, Wilkins, andCrick all received Nobel prizes in 1962. (Franklin had diedin 1958.)

By the end of the twentieth century, geneticists andmolecular biologists were achieving breakthroughs onmany fronts and applying their findings in unexpectedways. For example, DNA testing resulted in freeing anumber of prisoners wrongly convicted of murder,including some on death row.

In 1986, with funds appropriated by Congress, theU.S. Department of Energy and the National Institutes ofHealth launched the Human Genome Project to determinethe precise DNA sequence of all the genetic material in the forty-six human chromosomes. Establishing a signifi-cant precedent, Congress set aside 5 percent of the

budget for studies of ethical and social questions raisedby the project.

The task involved the computer analysis of massivequantities of biostatistical data. A private biotech compa-ny, the Celera Genomics Corporation, soon joined therace. In June 2000 the heads of the Celera and HumanGenome Project teams jointly made a “working draft” ofthe human genome available to researchers. Some com-pared the achievement to the mapping of the vast NorthAmerican interior in the nineteenth century.

In 1997 in Scotland, meanwhile, veterinary researcherssuccessfully cloned a sheep, producing a lamb namedDolly. In other words, they created a precise genetic replicaof a sheep by transferring the nuclei of its cells into anunfertilized egg from a female sheep, and then implantingthe egg into the donor female, where it grew the way anegg fertilized by normal breeding would have. This soonlead to excited speculation about cloning human beings—a scary prospect that some scientists dismissed as sci-ence-fiction. Nevertheless, President Bill Clinton bannedthe use of federal funds for human-cloning research, andurged a “voluntary moratorium” on all such efforts.

1010

More immediate concern focused on the medicalapplications of genetic research. By 2000 medical investi-gators had isolated defective genes that created a higherthan normal probability that individuals would developbreast cancer, ovarian cancer, cardiovascular disease,dementia, cystic fibrosis, Huntington’s disease (the neu-rological disorder that killed folksinger Woody Guthrie),and other ailments. In 2001 physicians began offeringtests to expectant Caucasian parents to see if both car-ried the genetic defect linked to cystic fibrosis. (This disease most commonly strikes Caucasians, with somethirty-thousand sufferers in America.)

The development of genetic-screening technologiesto identify persons at risk for specific diseases offeredthe promise of early medical intervention, but also raisedethical dilemmas. While some individuals sought outsuch information so they could take precautionary meas-ures, others preferred not to know. The danger thatgenetic information could fall into the hands of potentialemployers, insurance companies, and government agen-cies threatened patients’ right of confidentiality.

Another troubling moral issue arose when James A.Thomson at the University of Wisconsin-Madison, alongwith scientists at other institutions, developed techniquesfor harvesting human stem cells from blastocysts (anearly stage of embryo development) that had been frozenfor the use of couples experiencing fertility problems.Typically, when a fertilized blastocyst is implanted in awoman’s body and she successfully gives birth, any left-over blastocysts are discarded. Scientists proposed touse these “surplus” embryonic stem cells for research ondiabetes, heart disease, and other illnesses. Stem cellsare especially useful because they can develop into manydifferent specialized human cells. But stem-cell researchstirred controversy because it involved the destruction ofearly-stage human embryos, which some religious groupsconsider to be human life. Said one American Catholicleader, “We are talking about not only the direction ofgenetic science, but also [about] . . . questions of humandignity.” In August 2001 President George W. Bush issueda compromise ruling allowing federal funding of researchusing existing stem-cell lines, but forbidding governmentsupport for research using human embryos dating fromthe period after his ruling.

In 2001 researchers converted cow skin cells intocow heart cells. If the same technique could be made to work with human cells, it would be unnecessary to use stem cells, and science would have resolved—orbypassed—this particular ethical dilemma.

These breakthroughs in human genetics openednew scientific horizons while raising profound ethical

issues. Politicians debated; medical ethicists offeredadvice; and the American Medical Association set upwebsites to help physicians deal with the ethical dilem-mas they faced as genetics increasingly affected medicalpractice.

As we have seen throughout The Enduring Vision,scientific discoveries and new technologies have vastlybenefited Americans. But they have also had unantici-pated cultural implications and posed troubling public-policy issues. As the twenty-first century unfolded, boththe technological advances and their unexpected socialconsequences and ethical dilemmas seemed certain tocontinue.

Focus Questions

• What have been the key achievements in molecularbiology since 1950?

• What promise did these achievements hold, andwhat ethical issues did they raise?

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at the Hague. In 2001, in a symbolic action underscoringthe growing resentment of America’s strong-arm tacticsat the United Nations, the United States was voted offthe U.N. Human Rights Commission, on which it hadserved since 1947.

The Bush administration did actively promote U.S.trade interests, a fact underscored by its relations withChina. In April 2001 a U.S. spy plane off China’s coastcollided with a Chinese aircraft monitoring it. TheChinese plane crashed, killing the pilot, and the dam-aged U.S. plane landed in China. Angry words followed,but $120 billion in annual trade spoke more loudly, andafter negotiations China released the U.S. crew. Sixmonths later President Bush attended an Asia-Pacificeconomic cooperation conference hosted by Beijing,and in November 2001 China formally entered the WorldTrade Organization.

The global economy remained a focus of protest,however. When the G-8 met at Genoa, Italy, in July 2001,violent street protests resulted in one death, manyarrests, and over two hundred injuries. The 2002 G-8meeting was held in Calgary in the Canadian Rockies,which planners hoped would be remote enough to dis-courage protesters.

Despite Bush’s commitment to foreign trade, domes-tic pressures influenced him as well. In 2002, respondingto demands from U.S. steel producers and the steelwork-ers’ union, Bush slapped tariffs of up to 30 percent onimported steel products for a three-year period. Whilethe tariffs did not apply to Canada, Mexico, or certaindeveloping nations, they did hit China, Japan, Russia,South Korea, and the EU, which protested this violationof free-trade principles. Whether the U.S. steel industry,with its steadily shrinking labor force and high produc-tion costs, could long survive even with tariff protectionremained an open question.

RECESSION WOES;CAMPAIGN FINANCE

BATTLES; ENVIRONMENTALDEBATES

A sharp recession abruptly ended the prosperity of the1990s and raised questions about the wisdom of the taxcut. Disagreements over economic policy, combinedwith criticism of Bush’s environmental record and along-running battle over campaign-finance reform,helped perpetuate the climate of intense political parti-sanship that pervaded the early Bush years.

End of the Economic Boom

The good times and stock-market boom of the 1990sbarely outlasted the decade. As Asian and Latin Amer-ican economies faltered, the U.S. economy suffered aswell. In March 2001, when according to economists therecession officially began, the stock market recorded itsworst week since 1989, falling by 6 percent. Millions ofstockholders felt the pain. Consumer confidence fell tothe lowest level in years. As corporate profits plunged,businesses announced layoffs. Ford fired five thousandmanagers and engineers. The unemployment rate rosefrom under 4 percent in 2000 to nearly 6 percent byNovember 2001. In that month alone, three hundredthousand workers lost their jobs.

The bursting of the Internet bubble worsened thedownturn. By one calculation, nearly 250 dot-com busi-nesses collapsed in a few months’ time. The marketvalue of the companies that did survive fell sharply.Instant millionaires watched their portfolios melt away.

To stimulate the economy, the Federal ReserveBoard cut interest rates eleven times in 2001, to a forty-year low. The Bush administration, having based its tax-cut plan on the assumption of continued budget sur-pluses, now projected years of deficits. Democratsstepped up their attacks on the administration’s overlyoptimistic economic projections and warned aboutthreats to social security and Medicare funds. As an anti-recession stimulus package, the administration pro-posed generous new tax breaks for corporations and thewealthy, and a speeding up of tax cuts that were alreadyapproved.

Few shed tears when casinos, luxury boutiques,overpriced restaurants, and dealers in vintage wines andexpensive cigars reported declining income. But retireeswith pensions plans invested in the stock market andlow-paid workers lacking job security typically suffermost in hard times, and the recession that began inSilicon Valley and Wall Street soon spread ominously.Industrial production was shrinking, and every state waslosing jobs. Service-sector employment fell faster in thelast quarter of 2001 than in any three-month periodsince World War II. Unskilled workers and former welfarerecipients seeking entry-level jobs faced problems.Openings for temporary workers dropped precipitously.The longest economic boom in American history hadended with a thud, and the impact spread through soci-ety. An anemic recovery began in 2002, but it was slowedby a series of business scandals that eroded investorconfidence (see below).


The Rocky Path of Campaign Finance Reform

In Congress, meanwhile, two senators—Arizona Re-publican John McCain and, Wisconsin Democrat RussFeingold—carried on the battle for campaign-financereform. They targeted so-called soft money contribu-tions made to political parties (rather than to specificcandidates) by individuals, corporations, unions, andlobbying organizations seeking to influence legislation.Such lobbies ranged from (mostly pro-Republican) busi-ness associations, tobacco companies, anti-abortiongroups, and the National Rifle Association to the (mostlypro-Democratic) National Education Association, triallawyers association, and labor unions. Given the soaringcost of TV advertising, soft money loomed increasinglylarge in electoral campaigns. In the 1997–1998 electoralcycle the national parties raised more than $190 millionin soft money; Wall Street investment companies alonecontributed $9 million to the Republican party and $6.2million to the Democratic party.

President Clinton had paid lip service to reformwhile endlessly appearing at fundraising events, and asscandal gripped the White House, the campaign-financeissue had faded. In the 2000 election soft-money contri-butions reached $400 million.

McCain and Feingold persevered, and in April 2001the Senate passed a version of their bill. In the Republican-controlled House, campaign-finance reform was champi-oned by Christopher Shays, a Connecticut Republican,and Massachusetts Democrat Martin Meehan.The Shays-Meehan bill passed in 2002. A com-mittee reconciled the House and Senate ver-sions, and Bush signed the bill. It banned soft-money contributions to national parties andphony TV “issue ads” that were really aimed atinfluencing elections, and included other meas-ures seeking to reduce the torrent of moneysloshing through the election system.

Whether the new law would achieve itspurpose remained unclear. Opponents voweda court challenge on free-speech grounds, andsome observers predicted that interest groupswould find ways to bypass the bill. In June2002 the Federal Election Commission, abipartisan regulatory body charged withadministering and enforcing election laws,issued a ruling that undermined key provisionof the law. As the battle went on, skeptics com-pared politicians of both parties, whose

careers depended on an endless flow of campaignmoney, to drug addicts facing the agonies of withdrawal.

Environmental Issues Persist

The Three Mile Island and Exxon Valdez incidents (seeChapters 30 and 31) forcibly reminded Americans ofmodern technology’s environmental risks, and a 1984disaster in Bhopal, India, in which deadly gases from aU.S.-owned chemical plant killed seventeen hundredpeople underscored the international scope of theserisks. Beyond specific incidents, long-term environmen-tal changes had grave implications for human well-being. The late twentieth and early twenty-first centuriesbrought growing environmental awareness, but a mixedrecord of environmental action.

With the Cold War over, Americans faced the esti-mated $150-billion cost of cleaning up nuclear-weaponsfacilities, including disposing of tons of weapons-gradeuranium and plutonium. The Hanford Nuclear Reser-vation in Washington State was a vast dump of radioac-tive waste (see Chapter 26, A Place in Time: The AtomicWest). The disposal of this material, as well as of radioac-tive plutonium from dismantled nuclear weapons andfuel rods from aging nuclear-power plants, stirred politi-cal disputes and grass-roots protest. In 1997 scientistsreported water seepage into the vast cave intended fornuclear-waste storage at Nevada’s Yucca Mountain. In2002, over objections from environmentalists, Nevadapoliticians, and Las Vegas gambling casinos, the Senate

Recession Woes; Campaign Finance Battles; Environmental Debates 1013

approved the Yucca Mountain site. In 2002 further con-troversy erupted over a Department of Energy (DOE)plan to transfer six tons of plutonium from a formernuclear weapons plant in Rocky Flats, Colorado to theDOE’s Savannah River facility in South Carolina forreprocessing into fuel for nuclear power plants.

Other environmental and health risks arose fromatmospheric changes linked to industrial processes. Acidrain carrying sulfur dioxide and other pollutants fromU.S. factories and auto exhaust threatened Appalachianforests and Canadian lakes. Fluorocarbons from spraycans, refrigeration equipment, and other sources deplet-ed the upper-atmosphere ozone layer, allowing increasedsolar radiation to reach Earth’s surface, increasing skin-cancer risks and other health hazards.

The threat of global warming seemed especiallyurgent. Carbon dioxide and other gases produced by fos-sil-fuel emissions and deforestation (as well as naturallyoccurring sources) were accumulating in the loweratmosphere, and the resulting “greenhouse effect” pre-vented Earth’s heat from escaping. Projecting currentworld trends, scientists predicted a 40 percent increase incarbon dioxide emissions by 2020. Atmospheric scientistswarned of long-term global warming that could disruptagricultural production and plant and animal ecosys-tems. In the most dire scenario, melting polar ice couldcause rising sea levels, flooding low-lying coastal regions.

Heightening global-warming fears, meteorologistsreported that the ten hottest years of the twentieth centu-ry all occurred after 1985. In Alaska, where the averageannual temperature rose seven degrees from 1972 to 2002,rising water levels in the Chukchi Sea threatened coastalvillages, and a new species of beetle that arrived with thewarmer weather devastated a four-million-acre spruceforest. Highways buckled as the permafrost melted, andengineers warned that the Alaska pipeline stretching fromPrudhoe Bay to Valdez could be destabilized.

Some environmental gains were recorded. Ac-cording to the Environmental Protection Agency (EPA),U.S. emissions of the principal air pollutants fell morethan 60 percent from 1970 to 1999. In 1996–1997,President Clinton secured passage of a bill strengthen-ing pesticide regulation and announced new air-qualitystandards to reduce soot and ground-level ozone. In1997 the EPA created an environmental “superfund” toclean up hazardous-waste sites. By 2001 more than thir-teen hundred such sites had been designated, thoughthe pace of cleanup proved slow.

Despite growing opposition to government regula-tions, support for environmental protection remainedstrong. Environmental groups that had long focused on

wilderness preservation now addressed urban issues aswell. When Republican legislators in 1995–1996 attackedthe EPA, they faced a sharp public backlash. In 2001 theSupreme Court unanimously upheld EPA’s right toestablish national air-quality standards.

The first two years of the George W. Bush adminis-tration dismayed environmentalists. On taking office,Bush announced that he would not implement pro-posed EPA measures to reduce carbon dioxide emissionsfrom power plants. As noted above, the administration’senergy program stressed “energy abundance” throughincreased production and less regulation, with littleattention to environmental concerns. Conservationmight be a “sign of personal virtue,” Vice PresidentCheney suggested, but was no basis for “a sound, com-prehensive energy policy.” Some of Bush’s environmen-tal actions roused particular opposition. An order per-mitting higher levels of arsenic in drinking water proveda public-relations nightmare. The proposed oil drillingin the Arctic National Wildlife Reserve and other publiclands stirred intense resistance.

On the international front, Bush repudiated the pro-tocol produced at a 1997 U.N.-sponsored internationalenvironmental conference in Kyoto, Japan, that set strictemission standards for industrialized nations, chargingthat it would jeopardize America’s economic growth andstandard of living. The administration, alone among 178nations, including 38 industrialized states, also refusedto sign a 2001 Bonn treaty specifically designed to meetBush’s objections to the Kyoto protocol. The Bonn treatywas “not in [America’s] interests,” declared nationalsecurity advisor Condoleezza Rice tersely, offering noalternative proposals for cutting industrial emissions.

These actions came at a time when the United States,with under 5 percent of the world’s population, account-ed for 25 percent of global energy consumption. In 2001passenger-vehicle fuel economy (including the popularlight trucks and sport-utility vehicles) fell to the lowestlevel in a decade. Yet the Bush administration appeared toenvision no slacking in this rate of consumption.

The administration’s environmental insensitivityflew in the face of mounting scientific evidence. ANational Science Foundation (NSF) report in 2001 con-cluded that global warming was real, and likely tobecome more serious.

Thanks in part to his approach to energy and envi-ronmental issues, Bush’s approval rating stood at onlyabout 50 percent midway through his first year. But sud-denly, politics as usual went out the window, and notonly President Bush but the entire nation faced a crisisthat would test them to the limit.


SEPTEMBER 11 AND BEYOND

The course of American history changed profoundly in September 2001, when a terrorist attack left thou-sands dead and the nation in shock. The nation’s prior-ities shifted at home and abroad. President Bush sum-moned the country to a war on terrorism that soon ledto Afghanistan and beyond. At home, the administra-tion took far-reaching measures to enhance securityand prevent future attacks. While all Americans agreedon the objective of these actions, some saw a potentialthreat to civil liberties in the vast strengthening of gov-ernmental powers of surveillance and detention.

Having shown little concern for world opinion earli-er, Bush now called upon all nations to join the UnitedStates in a war on terrorism. Despite the administration’ssingle-minded focus on the antiterrorism campaign,other world issues demanded attention, particularly theIsraeli-Palestinian conflict. As that struggle threatenedto spiral out of control, the administration at lastbecame involved in the elusive quest for peace.

Domestically, despite the post-September 11 unityimpulse, political partisanship soon revived. The free-dom to disagree was, after all, what made America worthdefending. Contentiousness deepened as Americansreacted in disbelief and anger to revelations of greed,deception, and fraud in some of the nation’s largest cor-porations during the boom years of the 1990s.

America Under Attack

Throughout American history, watershed events havemarked historic turning points. The clash betweenMassachusetts farmers and British redcoats on April 19,1775, hastened the Revolutionary War. The Confederates’attack on Fort Sumter in Charleston harbor on April 12,1861, began the Civil War.

Another such pivotal moment came on the morningof September 11, 2001. As Americans watched their tele-visions in horror, the blazing twin towers of New York’sWorld Trade Center crashed to the earth, carrying morethan 2,800 men and women to their deaths. A simulta-neous attack on the Pentagon left 245 dead on theground, and a plane crash in western Pennsylvaniadirectly related to these events killed still more innocentpeople. Only the Civil War battle of Antietam, in which3,650 soldiers died, brought a higher single-day toll ofAmerican dead.

At the World Trade Center, nearly 350 firefighters and23 police officers perished. Many people trapped by theflames leapt to their death. Father Mychal Judge, a firedepartment chaplain, suffered a fatal heart attack whileadministering last rites to victims. Firemen placed hisbody on the altar of nearby St. Peter’s Catholic church.Businesses with offices in the Twin Towers suffered cata-strophic losses. One brokerage firm lost 600 workers.

New York City essentially shut down. Bridges wereclosed; subway trains stopped running. Commercial

September 11 and Beyond 1015

aircraft were grounded; incoming flights from abroadwere ordered to return or diverted to Canada. Only mili-tary fighters patrolled the skies over New York andWashington. President Bush put the military on highalert and mobilized the national guard.

The World Trade Center towers and the Pentagonhad been struck by three commercial aircraft piloted byhijackers in a carefully planned assault on these highlyvisible symbols of U.S. economic and military power.The Pennsylvania crash occurred when heroic passen-gers prevented terrorists from diverting the plane toanother target, possibly the White House.

The destruction of the World Trade Center that ter-rorists had failed to accomplish eight years before (seechapter introduction) had now tragically been achieved.Along with the dead on the ground, 246 passengers andcrew, plus 19 hijackers, died in the four planes. The gov-ernment soon identified the hijackers, all foreignersfrom the Middle East, and traced their actions beforeSeptember 11, including enrollment in Florida flight-training schools.

In a few hours of terror, a new and menacing erabegan. Terrorism—whether assassinations or bombedbuildings, buses, ships, and planes—was familiar else-where, of course, and many U.S. citizens, civilian andmilitary, had died in earlier terrorist attacks in the 1980sand 1990s. The lethal career of the letter bomber TedKaczynski and the 1995 bombing of the Oklahoma Cityfederal building had made clear that America was notimmune to such attacks. But now terrorism had eruptedon U.S. soil on a far vaster and more horrifying scale. Forthe first time since the War of 1812, a foreign enemy hadattacked the American homeland.

A wave of patriotism gripped the nation. The politi-cal divisions that had grown so intense were temporar-ily put aside. Flags flew from homes, public buildings,and automobile antennas. Irving Berlin’s “God BlessAmerica,” often heard during World War II, became theanthem of the moment. “United We Stand” proclaimedbanners, billboards, and bumper stickers. PresidentBush visited a mosque to urge Americans to distinguishbetween a handful of terrorists claiming to act in thename of Allah and the world’s 1.2 billion Muslims,including as many as 6 million in the United States.Nevertheless, many Middle Easterners in America facedhostility and even violence in the post-attack period.

The damaged New York Stock Exchange closed forsix days. When it reopened, stock prices plunged. Evenafter stocks slowly edged upward, retail sales declinedand consumer confidence remained fragile amid anxietyabout the future. The airline and travel industries reeled

as jittery travelers canceled trips or chose ground trans-portation. A $15 billion bailout of the airlines by Congresshelped, but the industry’s problems remained. New York’stourist and entertainment industries suffered severely.“Vacant Rooms, Empty Tables, and Scared Tourists,”headlined one New York newspaper.

Post-September 11 anxieties deepened in earlyOctober when an editor at the Florida offices of theNational Enquirer, a tabloid newspaper that had attackedOsama bin Laden, died of anthrax, a rare and deadlybacterial disease. He had contracted it, investigatorsclaimed, from anthrax spores sent in a letter. Letterscontaining high-grade anthrax spores next appeared inthe office of NBC news anchor Tom Brokaw and SenatorsTom Daschle and Patrick Leahy. The Senate OfficeBuilding was closed for decontamination. Four otherpersons, two of them postal workers, died from anthrax-tainted pieces of mail, evidently contaminated by con-tact with the original letters.

Panic spread, and people feared opening their mail.Analysis of the anthrax spores indicated that they hadprobably been made in a U.S. research laboratory, andinvestigators focused on finding a domestic source ofthe deadly mailings.

Battling Terrorist Networks Abroad

President Bush, speaking briefly from the White Houseon September 12, declared the attacks an “act of war.”On September 15, the Senate unanimously authorizedBush to use “all necessary and appropriate force” torespond.

On September 20, as had other presidents in timesof crisis, a somber Bush addressed a joint session ofCongress. He blamed the attack on the Al Qaeda terroristnetwork headed by Osama bin Laden from headquartersin Afghanistan. Bin Laden, already under indictment forthe 1998 attack on U.S. embassies in Africa, had longdenounced America for supporting Saudi Arabia’s cor-rupt regime, stationing “infidel” troops on Saudi soil,backing Israel, and spreading wickedness through itssinful mass culture. (Ironically, the United States and binLaden had been uneasy allies in the 1980s, when he wasfighting Russian forces in Afghanistan.) A videotape ofbin Laden describing how he planned the attack andeven laughing about the massive damage, discovered inAfghanistan and released by the Bush administration inDecember, helped convince any remaining doubters ofhis guilt. Though bin Laden claimed to have acted onbehalf of Islam and endlessly invoked the name of Allah,


most Islamic leaders repudiated him and condemnedattacks on innocent civilians.

Bush announced a military campaign to uproot AlQaeda and its protectors, the Pakistan-trained Islamicistgroup called the Taliban, which had seized power inAfghanistan in 1996. As part of a program to disrupt theterrorists’ money supply, Bush froze the assets of organi-zations with possible links to the terrorists.

Despite the pro-Taliban sympathies of Muslim fun-damentalists in Pakistan, Bush enlisted the cooperationof Pakistan’s military government. Complicating U.S.military planning was Afghanistan’s forbidding terrainand patchwork of ethnic and tribal groups. The majoranti-Taliban force, the Northern Alliance, was an uneasycoalition of rival warlords.

The military phase of the antiterrorist operation,launched on October 7, achieved impressive success.Battered by U.S. bombing and an offensive by NorthernAlliance forces, the Taliban soon surrendered Kabul(the Afghan capital) and other strongholds. British,Canadian, Pakistani, and other forces played an impor-tant role in this campaign. By mid-December, despitesporadic resistance, the United States claimed victory.As more U.S. special forces arrived, a remnant of AlQaeda fighters retreated to fortified caves in the ruggedmountains of eastern Afghanistan, between Kabul andthe Khyber Pass, pursued by local Afghan fightersbacked by U.S. and British commandos and Americanbombing raids. The whereabouts of Osama bin Ladenremained unknown, however.

The fighting was brutal. Northern Alliance fighterskilled some Taliban even after they had surrendered. Inlate November, Taliban prisoners, mostly Pakistanis,among hundreds held at a fortress near Kunduz, seizedweapons from their guards. In a wild night of fight-ing and bombing, most of the prisoners were killed. The civilian population, already devastated by droughtand years of civil war, suffered terribly. Despite U.S. and international relief efforts, including food drops, the refugee situation—worsened by winter weather—remained desperate. Military operations unquestion-ably disrupted the Al Qaeda forces, but many retreatedinto remote parts of Afghanistan and Pakistan, suggest-ing that a long struggle lay ahead. More than three hun-dred captured Al Qaeda fighters were transferred toprison facilities at the U.S. base in Guantanamo, Cuba.

The diplomatic challenge of welding rival factionsinto a workable post-Taliban government proved diffi-cult as well. As a first step, a British-led internationalforce was mobilized to maintain law and order in Kabul.In June 2002, with U.S. support, an assembly of Afghan

tribal leaders called a loya jirga established a new gov-ernment and chose an interim prime minister, HamidKarzai. The nation-building effort had the blessing ofAfghanistan’s eighty-nine-year-old former king, whoreturned to Kabul after years in exile.

International support for the initial phase of America’santiterrorist campaign remained strong. British PrimeMinister Tony Blair proved a pillar of strength. For the firsttime, NATO forces fought in defense of a member nation.

The administration sought to broaden the strugglebeyond Afghanistan and Al Qaeda. In his January 2002State of the Union address, President Bush identifiedIran, Iraq, and North Korea as an “axis of evil” hostile toAmerica and intent on developing weapons of massdestruction, including chemical and biological weapons.In May the president added Cuba, Libya, and Syria to thelist. Most of these nations denied the charges.

Shadowing the post-September 11 strategic debatewas a troubling question: would eliminating Al Qaedaand bin Laden end the terrorist threat? While most Arableaders repudiated bin Laden, many among the impover-ished, ill-educated Arab masses were receptive to his anti-American harangues. Ending terrorism, clearly, involvednot only military operations, but also long-term diplo-matic, political, and ideological efforts as well.


Tightening Home-Front Security

Thanks to the post-September 11 spirit of unity andAmericans’ strong support for the military campaign inAfghanistan, Bush’s approval ratings soared. The admin-istration’s domestic antiterrorism campaign provedmore controversial, however. Despite Republicans’ tra-ditional hostility to big government, the administrationsignificantly expanded the federal government’s role inmany aspects of American life.

The initial response was somewhat confused. Noclear lines of authority emerged among various govern-ment agencies. Bush appointed former Pennsylvaniagovernor Tom Ridge to head a new White House office ofhomeland security, but his duties remained vague.

Political divisions emerged over the newly urgentissue of aviation security. While some legislators andothers urged that the nation’s 28,000 airport securityworkers become federal employees, others opposed thisexpansion of the federal labor force. Late in 2001,Congress required all security personnel to be U.S. citi-zens and to meet rigorous job criteria and performancerequirements set by a newly created TransportationSecurity Administration.

After September 11, the Justice Department detainedmore than one thousand Middle Easterners living in theUnited States, some for visa violations, and held them forquestioning without filing charges or, in most cases,revealing their names. In an Orwellian touch, AttorneyGeneral Ashcroft claimed that to identify the detaineeswould violate their civil rights. These arrests raised seri-ous civil-liberties issues. Some local police officials re-fused to cooperate in the wholesale roundup of personsnot accused of crimes simply on the basis of their ethnic-ity or national origin.

The treatment of the prisoners at Guantanamoraised questions as well. Human-rights advocates urgedaccording them the rights of prisoners of war under theGeneva conventions. U.S. officials insisted that the menwere being treated humanely, but took the position thatthey could be held indefinitely as a matter of nationalsecurity.

The USA-Patriot Act, a sweeping antiterrorist lawproposed by the administration and overwhelminglypassed by Congress in October 2001, extended the gov-ernment’s powers to monitor telephone and e-mail com-munications, including conversations between prisonersand their lawyers. This, too, stirred apprehension in civil-liberties circles. Conservatives suspicious of big govern-ment, who had applauded John Ashcroft’s appointmentas attorney general, were troubled by his calls for vastlyexpanded federal powers after September 11.

In November, without consulting Congress, Bushsigned an executive order empowering the governmentto try noncitizens accused of fomenting terrorism insecret military tribunals rather than in the civilian jus-tice system. While precedent existed for such tribunalsin wartime, this proposal roused opposition from civillibertarians and others. Opinion polls found Americansto be divided evenly on the use of military tribunals, butstrongly at odds with Bush’s failure to consult Congressin the matter.

In May 2002 news media reported disturbing evi-dence of missed clues before the terrorist attack. InAugust 2001, for example, a flight school in Minnesotawarned the FBI of a suspicious person named ZacariasMoussaoui who had tried to enroll. Moussaoui had been arrested on immigration charges, but the JusticeDepartment had denied a request by the MinneapolisFBI office for permission to check his computer. (AfterSeptember 11 Moussaoui’s link to bin Laden was discov-ered, and in 2002 he went on trial in Virginia.) In JuneCongress launched an investigation of these intelligencebreakdowns, as well as of the poor relations between theFBI and the CIA that prevented the two agencies fromcooperating.

Diverting attention from these potentially damag-ing inquiries, President Bush seized the moment to pro-pose a new cabinet-level Department of HomelandSecurity to coordinate the domestic antiterrorism effort.Having earlier rejected calls for such an agency, Bushnow shifted ground abruptly. The new department,approved by Congress in November, 2002 absorbedmany government agencies, including the Coast Guard,the Customs Service, the Immigration and NaturalizationService, the Federal Emergency Management Agency,and even a plant inspection agency in the Departmentof Agriculture. It would not, however, include the FBI orthe CIA. As Congress debated the proposal, someAmericans questioned whether a reshuffling of existingagencies made America more secure.

Deepening Crisis in the Middle East

With Yasir Arafat’s rejection of Israel’s peace plan atCamp David and the launching of a second Intifada inSeptember 2000, violence in the region exploded.Suicide bombings took many Israeli lives. The bombersdeliberately chose crowded targets such as buses andrestaurants. An Israeli cabinet minister was assassinated.

Asserting its right of self-defense, Israel retaliated,using U.S.-supplied tanks and military aircraft to attackPalestinian targets in the West Bank, and assassinatedleaders of Hamas, a violently anti-Israel organization


responsible for many of the bombings. The Israelis peri-odically closed border crossings for security reasons,keeping Palestinian laborers from jobs in Israel anddeepening Palestinian anger. None of these measuresstopped the suicide attacks; indeed, the number ofattacks increased in the spring and summer of 2002.

Prime Minister Ariel Sharon, backed by Israeli pub-lic opinion, demanded an end to violence before peacetalks could resume, and dismissed Arafat as too weakand devious to stop the terrorists or end corruption inthe Palestinian Authority. Arafat, in turn, insisted that aslong as Israel fostered Jewish settlements in the WestBank and Gaza; dominated the region militarily; con-trolled water rights and highway access; and in otherways behaved as a colonial power, the anger that fueledthe violence would continue. A fact-finding missionheaded by former Senator George Mitchell concludedthat peace prospects were dim unless Israel halted con-struction of new West Bank settlements.

Since Israel depended upon economic and militaryaid from the United States, America was deeply impli-cated in the events in the region. Nevertheless, the Bushadministration initially stood apart from the worseningconflict. A U.S.-brokered truce in June 2001 collapsedamid continued attacks and counterattacks.

In March 2002, after a particularly devastatinground of suicide bombings, including a deadly attack ona Passover seder at a restaurant, Israel launched a majorassault in the West Bank. Parts of the city of Jenin, a cen-

ter of terrorist activity, were reduced to rubble. A stand-off between armed Palestinians and Israeli troopsunfolded around Bethlehem’s Church of the Nativity.The Israelis besieged Arafat’s compound in Ramallah,confining him in a single building for days. Eventuallythe Israelis withdrew, but conditions remained tense,and violence continued on both sides.

In a June 2002 speech, President Bush called for cre-ation of a Palestinian state and the resolution of otherdisputed issues. But he spoke only in generalities, offer-ing no plan. He also demanded an end to terrorism and embraced the Israeli position that Arafat must go.While many Palestinians and Arab leaders privatelyagreed that Arafat had outlived his day, they resentedoutside attempts to push him aside. Experts on theregion warned that Arafat’s successor might be even lessacceptable.

Since 1948 the United States, as Israel’s principalally, had tried without success to broker an enduringpeace in the region. The familiar pattern of fresh initia-tives by each new administration followed by frustrationand defeat appeared to be repeating itself. Yet optimistspointed to other long-running conflicts, such as the onein Northern Ireland, where progress toward a resolutionhad been achieved. Despite the frustration, they insist-ed, the effort for peace must continue.

As the war on terrorism and the Israeli-Palestinianconflict continued in the fall of 2002, the Bush adminis-tration focused increasingly on Iraq. Iraq's president


Saddam Hussein had been a thorn in America’s fleshsince the Persian Gulf War, which had left him weak-ened but still in power. In a barrage of speeches, Bush,Cheney, and Defense secretary Rumsfeld warned ofSaddam’s hatred of the United States and Israel; hisrecord of aggression; and his efforts to develop weaponsof mass destruction. U.S. security, they argued, demand-ed a preemptive war to overthrow the Iraqi dictator.

Initially opposing the administration position weresome prominent Democrats and even a few Republicanleaders, as well as religious groups and organizationscommitted to international cooperation and conflict-resolution through diplomacy. Charging that a preemp-tive war would violate U.S. principles, the critics chal-lenged the administration to produce firm evidence thatSaddam posed an immediate threat to the United States,and warned that such a war could unleash turmoilacross the Arab world and bog down U.S. forces foryears. Some even accused the administration of usingIraq to divert attention from the worsening economy.Critics also cautioned that the preoccupation withSaddam could undermine the larger anti-terrorist cam-paign. While British Prime Minister Tony Blair backedthe administration, France, Germany, other Europeannations, and most Arab leaders objected. To counter the

rush to war, they called for a UN resolution demandingthat Iraq grant complete and unrestricted access to UNweapons inspectors, who had departed in 1998 whenthe Iraqis denied them full access to all sites.

Under pressure to secure UN backing, PresidentBush in October 2002 presented the case against Saddamin a UN address. Despite deep divisions in U.S. publicopinion, the House and Senate passed resolutionsauthorizing U.S. military action against Iraq. Republicanlawmakers embraced the resolutions while Democratsdivided, fearful of opposing Bush as an election nearedbut concerned about what some saw as a rush to warwith no clear plan for dealing with a post-Saddam Iraq.On November 8, the UN Security Council unanimouslyadopted a resolution imposing tough new weaponsinspections on Iraq. Baghdad sullenly agreed and UNinspectors returned, but a U.S.-led war remained a realpossibility if Iraq violated the resolution’s strict terms.

Bankruptcies and Scandals in Corporate America

The recession soon led to a series of high-profile bank-ruptcies among energy and telecommunications com-panies that had thrived in the high-flying 1990s. With thebankruptcies came accusations of criminal behaviorand false accounting reports that produced a crisis ofconfidence in the integrity of corporate America.

The first casualty was Houston’s Enron Corporation,with close ties to the Bush-Cheney administration.Selling electric power in advance at guaranteed rates,Enron flourished in the freewheeling climate of the1990s and branched out into utilities and telecommuni-cations. Celebrated as a model of the new economy, thecompany charmed investors. In 2000, claiming assets of$62 billion, it ranked seventh in Fortune magazine’s listof the top five hundred U.S. corporations.

Suddenly the house of cards collapsed. Late in 2001,with its stock selling for sixty-one cents a share, Enronfiled for bankruptcy and admitted to vastly overstatingprofits. Thousands of Enron workers lost not only theirjobs but also their retirement funds, which consistedmostly of Enron stock. Like the collapse of the savingsand loan boom and the disgrace of traders like MichaelMilkin and Ivan Boesky in the 1980s (see Chapter 30),Enron’s demise highlighted the risks of obsession withsoaring profits, fat bonuses, and ever-rising stock prices.

Enron was only the beginning. The overbuilt fiber-optics industry, having laid 100 million miles of opticalfiber worldwide in 1999–2001, suffered staggering blows.Lucent Technologies, a telecommunications giant, cutnearly one hundred thousand jobs in 2001. Global


Crossing, a high-speed voice and data carrier, declaredbankruptcy in 2002, the fourth largest in U.S. history. InJune 2002 WorldCom, America’s second-largest telecom-munications company and owner of long-distance com-pany MCI, announced that its chief financial officer hadoverstated profits by $3.8 billion. As WorldCom stockdropped to nine cents a share, the company fired seven-teen thousand employees and filed for bankruptcy. TheSecurities and Exchange Commission launched crimi-nal proceedings; congressional committees held hear-ings; and President Bush called the WorldCom decep-tion “outrageous.”

Charges of fraud and deception spread throughoutthe business world. In 2002 the Justice Departmentbrought criminal charges against Arthur Andersen, agiant Chicago accounting firm that had certified theaccuracy of the financial reports of Enron, WorldCom,and other troubled companies. As Enron’s problems hadbecome public, officials at Arthur Andersen’s Houstonoffice destroyed potentially incriminating files and e-mail communications. A grand jury found the firmguilty, and it faced dissolution. The integrity of theaccounting industry as a whole, so crucial to investorconfidence, fell under suspicion.

Investment companies faced scrutiny as well, amidevidence that to generate business and keep profits highduring the boom years, analysts at Merrill Lynch andother Wall Street firms had advised investors to buystocks at inflated prices. Under pressure from the NewYork State attorney general, Merrill Lynch agreed to pay$100 million in fines.

Public outrage deepened amid reports of corporateexecutives who sold their own stock holdings for mil-lions of dollars just before their companies’ troublesbecame public. Attention focused, too, on the stratos-pheric salaries and stock benefits these CEO’s hadearned. In his 2002 book Wealth and Democracy, KevinPhillips reported that America’s top ten CEO’s earned anaverage of $154 million each in 2000. The greed prevail-ing at the upper levels of capitalist America seemedboundless.

The wave of bankruptcies of seemingly healthycompanies and the disclosures of deception and shadypractices in corporate America slowed the economicrecovery. Despite positive economic news, the stockmarket sank through much of 2002, as distrustfulinvestors stayed away.

At a deeper level, the escalating scandals seriouslyeroded the standing of corporate America. Executiveswho had been celebrities in the 1990s now faced deeppublic skepticism if not criminal investigation. TheUniversity of Maryland business school took its students

on field trips to penitentiaries where white-collar crimi-nals warned them to be honest. Declared the chairmanof Goldman Sachs, a major Wall Street investment bank,“I cannot think of a time when business . . . has beenheld in less repute.”

In the summer of 2002, as the stock-market sank tofive-year lows and more corporate scandals erupted,politicians and government agencies scrambled torespond to mounting public anger. President Bush deliv-ered a stern speech about the need for business morality.The head of the understaffed and quiescent Securitiesand Exchange Commission, the watchdog agency createdin the 1930s, declared that the SEC would vigorouslypursue wrongdoers. In late July, in the first of whatpromised to be a series of criminal prosecutions, John J.Rigas and two of his sons, who had allegedly looted thefamily-owned TV-cable business, bankrupt AdelphiaCommunications, of $1 billion, were arrested and heldfor trial. At the same time, Congress passed by over-whelming margins and President Bush signed a new reg-ulatory law designed to reassure investors. It imposedstricter accounting rules, tightened regulations for cor-porate financial reporting, and toughened criminalpenalties for business fraud. The widespread disgustwith big business evoked memories of the ProgressiveEra, when reformers and muckraking journalists haddenounced corporate greed and ruthlessness. It alsorecalled the early 1930s, when business leaders who hadbeen admired in the prosperous 1920s faced public hos-tility as hard times sank in. The pendulum would nodoubt swing again, but for the moment the status of cor-porate America could hardly have been lower.

Election 2002

The corporate scandals posed dangers for the Bushadministration, with its close ties to big business. TheHalliburton Company, formerly headed by Vice PresidentCheney, was one of the firms whose financial reportingpractices came under scrutiny. Bush’s energy programhad been crafted by leaders of the industry, and his pro-posed “economic stimulus package” would have givenlucrative tax breaks to America’s biggest corporations,including a $254 million windfall to Enron. Bush’s ownhighly profitable 1990 sale of his stock in a failing Texasenergy company of which he was a director came up forfresh examination.

As the business scandals unfolded, the 2002 electionapproached. Midterm elections often serve as referendaon the president’s performance, as Bill Clinton learnedin 1992. How would voters assess President Bush, andhow would their assessment affect the election out-


come? Would Bush be seen as the bold leader of a unitedpeople waging a just war on terrorism? Or would he beviewed as a president who did the bidding of a powerfuland socially irresponsible corporate elite whose reputa-tion lay in tatters?

November 5, 2002, brought the answer, as Republicansregained control of the Senate and increased theirHouse majority. The outcome reversed the usual mid-term election pattern, when the president’s partytypically loses ground. President Bush, enjoying popu-larity ratings close to 70 percent, had campaigned tire-lessly, stressing the war on terrorism and the threat ofSaddam Hussein. The Democrats proved unable to shiftfocus to the economy and corporate scandals. SaidSenator Tom Daschle of South Dakota, the out-goingmajority leader: “The president made [Iraq and the waron terrorism] his drumbeat. It resonated.” A Coloradovoter commented: “[R]ight now in our country we needprotection and I don’t want to see President Bush getstalemated by another party’s views as far as protectingour country.” In the wake of the defeat, RepresentativeRichard Gephardt of Missouri resigned as HouseDemocratic leader. He was replaced by Nancy Pelosi ofCalifornia, who became the first woman of either partyto hold such a major leadership position in Congress. AsBush laid plans to push his agenda abroad and at home,including further tax cuts, an aggressive energy policy,and congressional confirmation of conservative judicialnominees, Republicans looked forward eagerly to 2004.

CONCLUSIONThe years spanning Bill Clinton’s second term and theonset of George W. Bush’s presidency also marked thetransition from one century to another. Brief as it was,this eventful interval brought many changes. TheRepublican administration that emerged from the dis-puted 2000 election pursued a conservative, probusi-ness domestic agenda and a more-independent, go-it-alone approach to foreign policy. The humming econ-omy of the 1990s stalled in 2000–2001, affectingAmerican life in many ways. And, as we saw in Chapter31, America’s social and demographic profile continuedto change as the surging growth of the Sunbelt contin-ued and the Hispanic and Asian populations grew at arapid pace.

On September 11, 2001, a shocking act of terrorismtransformed America. Sixty years earlier, PresidentFranklin D. Roosevelt had called December 7, 1941, “aday that will live in infamy.” The same could be said ofSeptember 11. The shattering events of that day openeda new chapter in U.S. history—a chapter that would

challenge the endurance, tolerance, and wisdom of allAmericans. Coping with the threat of terrorism requirednot only military and security measures, but also arenewed commitment to fair play, respect for civil rights,and concern for the oppressed of the world, whatevertheir ethnicity, religion, or skin color—the values thatmake America worth preserving.


CHRONOLOGY, 1996 TO THE PRESENT

1994 Oslo Accords establish framework for peace betweenIsrael and Palestinians.

1995 World Trade Organization (WTO) replaces GATT asregulator of world trade.Dayton Accords establish cease-fire in Bosnia.

1996 Clinton reelected.1997 Kyoto Accords on emissions standards.1998 Terrorists bombings of U.S. embassies in Kenya and

Tanzania.House of Representatives impeaches Clinton.

1999 NATO offensive drives Yugoslav forces out of Kosovo.Senate trial acquits Clinton.

2000 Congress normalizes trade relations with China.End of economic boom.Yasir Arafat rejects Israeli peace plan; second Intifadabegins.USS. Cole bombed in Aden harbor, Yemen.Presidential election: Al Gore wins popular vote; GeorgeW. Bush chosen by electoral college after SupremeCourt intervenes to resolve disputed Florida vote.Republicans retain slim majorities in both houses ofCongress.

2001 Bush administration repudiates Kyoto protocol onemission standards.Congress passes $1.35 trillion tax cut bill.Senator Jeffords becomes an independent; Democratsregain control of Senate.September 11 terrorist attacks on World Trade Center,Pentagon.U.S. and allied forces defeat Taliban regime inAfghanistan and attack Al Qaeda terrorist network.U.S. withdraws from ABM (Anti-Ballistic Missile) Treatyand begins construction of missile defense system.Collapse of Enron Corporation leads to wave ofcorporate bankruptcies and accounting scandals.

2002 Bipartisan Campaign Reform Act.Department of Homeland Security approved.Palestinian suicide bombings; Israeli invasion of WestBank.

As 2001 ended, Norway awarded the Nobel PeacePrize to Kofi Annan, secretary general of the UnitedNations. Accepting the award in Oslo, Annan acknowl-edged the irony of celebrating peace amidst rampant warand terrorism. “We have entered the third millenniumthrough a gate of fire,” he said. Annan went on to call for arededication to the vision that had inspired the U.N.’sfounders fifty-six years earlier. Despite the hatred and vast inequalities dividing nations and peoples, he insist-ed, the fate of all Earth’s inhabitants was interconnected.“In the 21st century,” he said, “I believe the mission of the United Nations will be defined by a new, more pro-found awareness of the sanctity and dignity of everyhuman life, regardless of race or religion. . . . Humanity is indivisible.”

FOR FURTHER REFERENCE

READINGS

The journals of political and cultural commentary listed inthe “For Further Reference” section of Chapter 31 are rel-evant to this chapter as well, as is the annual govern-ment publication Statistical Abstract of the United States,with its wealth of economic, social, and demographicinformation.

David Barney, Prometheus Wired: The Hope for Democracyin the Age of Network Technology (2000). Reflections onthe civic and political implications of the new informa-tion technologies.

David Brooks, Bobos in Paradise: The New Upper Class and How They Got There (2000). Witty and shrewd cultural profile of the baby-boom generation in the affluent 1990s.

James W. Caesar and Andrew E. Busch, The Perfect Tie: TheTrue Story of the 2000 Presidential Election (2001). Athoughtful and readable account of the Bush-Gore campaign.

Fred Halliday, Two Hours that Shook the World: September11, 2001: Causes and Consequences (2001). A Britishinternational-affairs specialist views terrorism in thecontext of political and ideological struggles within theArab world.

Chalmers Johnson, Blowback: The Costs and Consequencesof American Empire (2001). A diplomatic historian exam-ines the domestic and international consequences ofAmerica’s global economic expansion.

Haynes Johnson, The Best of Times: America in the ClintonYears (2001). Thoughtful reflections on American culturein the 1990s.

Anthony Lake, Six Nightmares: Real Threats in a DangerousWorld and How America Can Meet Them (2001). A foreign-affairs specialist explores a variety of terroristthreats and offers recommendations for responding tothem.

Kevin Phillips, Wealth and Democracy (2002). Criticalanalysis of the corporate practices of the 1990s and theirimplications for American democracy.

Paul Pillar, Terrorism and U.S. Foreign Policy (2001). Acounterterrorism specialist argues that effective intelli-gence work and cooperation with other nations offer thebest hope.

Cass R. Sunstein and Richard A. Epstein, eds., The Vote:Bush, Gore, and the Supreme Court (2001). Scholars rep-resenting a broad spectrum of viewpoints analyze thelegal struggle to resolve the 2000 election controversy.

Peter Trubowitz, Defining the National Interest: Conflictand Change in American Foreign Policy (1998). Exploresthe domestic economic and political calculations thathelp shape U.S. diplomacy.

William Julius Wilson, When Work Disappears: The World ofthe New Urban Poor (1996). A sociologist looks at thoseleft behind by the high-tech, high-skilled economy.

WEBSITES

Bureau of Labor Statisticshttp://www.bls.gov/home.htmThe home page of this government agency includes awealth of data about the U.S. economy and labor force.

CNN, Election 2000http://www.cnn.com/ELECTION 2000Everything you wanted to know about the 2000 election,including the disputed Florida outcome.

National Institutes of Health, Stem Cells, A Primerhttp://www.nih.gov/news/stemcell/primer.htmBasic scientific information about human stem cells, thesubject of public-policy debate in 2001.

PBS, The Impeachment Trialhttp://www.pbs.org/newshour/impeachmentExtensive information on the impeachment of PresidentBill Clinton based on PBS News Hour broadcasts, includ-ing a complete transcript of the Senate trial, statementsby key figures, historical background on impeachment,and historians’ commentary.

Research and Reference Resources. Events of September11, 2001.http://www.freepint.com/gary/91101.htmlThis website, maintained by a librarian and informationconsultant in Washington, D.C., offers documents,speeches, journalistic accounts, editorials, articles, andvideos relating to the attack of September 11, 2001; theanthrax scare; the U.S. military action in Afghanistan,and the domestic antiterrorism campaign.

The White House: President George W. Bushhttp://www.whitehouse.gov/president/gwbbio.htmlThis White House website includes a biography ofPresident George W. Bush in English and Spanish.

For additional works please consult the bibliography at theend of the book.

For Further Reference 1023

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