TIME: Almanac 1993/TIME Almanac 1993.iso/time/caps/87/87capts.2

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                                                                                January 4, 1988

"The Roughest Year"


Scandal, war, crash, plague...and who's in charge?


In a sense, the Man of the Year is almost always the President
of the United States, no matter who that may be. He
accomplishes deeds great and small. He receives credit and
blame for things he did not do. He has the most powerful job,
the highest visibility and, inevitably, the greatest influence
on the news.

That still was partly true for Ronald Reagan in 1987,
particularly when he joined Soviet Leader Mikhail Gorbachev this
month for the grand rituals of signing away all the world's
intermediate-range nuclear missiles. Nonetheless, this was a
disappointing year for the President, who turned 76 and
underwent three new bouts of surgery. Although he remained in
the spotlight, he lingered there largely as a victim, a passive
witness to the erosion and disintegration of his own fading
Administration.

Just a year earlier, when America blazed with celebrations for
the 100th birthday of the Statute of Liberty, Reagan had seemed
the most popular President in years. But after a steady flow
of congressional hearings on the Iran-contra arms scandal, or
war threats in the Persian Gulf, of huge budgetary and trade
deficits, of a declining dollar and a crashing stock market, his
own stock fell. A CBS/New York Times poll at the end of November
reported that 45% of the citizenry approved of the way Reagan
was doing his job, down from 52% only six weeks earlier.

So in TIME's annual effort to evaluate the biggest news stories
of the year, the common theme running through the large-type
headlines of 1987 was Ronald Reagan. He was there not so much
for his accomplishments as for his lack of them. "Terrible,
terrible," said Nancy Reagan, herself a victim of cancer, in a
year-end interview with the Washington Post. "Overall, I guess
the whole year has been the roughest."

At the start, Reagan was full of defiance about the sale of
U.S. missiles to Iran. That effort, obviously aimed at winning
the release of American hostages in Lebanon, had been an
embarrassing violation of his repeated pledges never to
negotiate with terrorist regimes, but Reagan simply denied it.
"We did not--repeat, did not-- trade weapons or anything else
for hostages," he said. After a three-month investigation,
however, a presidential review board headed by former Texas
Senator John Tower found that the "initiative became in fact a
series of arms-for-hostages deals."

Reagan cooperated with the Tower commission, but when asked
whether he had specifically approved Israeli sales of U.S.
missiles to Iran, he first said that he had, then that he had
not, then that the "simple truth is, I don't remember."  On the
basis of such evidence, the Tower commission condemned Reagan's
careless "management style" and complained that the "President
did not seem to be aware of the way in which the operation was
implemented."

The President finally conceded his error. "I told the American
people I did not trade arms for hostages," he said. "My heart
and my best intentions still tell me that's true. But the facts
and the evidence tell me it is not."

Selling weapons to Iran was bad enough. Using the profits to
arm the Nicaraguan contras was an outrage to many members of
Congress, which had banned such aid. That transgression became
the focal point of the summer-long investigation by a joint
congressional committee. Once again, Reagan's statements were
contradictory. On several occasions, he denied knowing how the
contras obtained their illegal aid. Then he startled listeners
by saying of private Nicaraguan funding "I've known what's going
on there. As a matter of fact, for quite a long time now, a
matter of years...It was my idea."  The committee was unable to
link Reagan to the illegal aid, but the panel's conclusions were
damning:  "The common ingredients of the Iran and contra
policies were secrecy, deception and disdain for law. A small
group of senior officials...destroyed official documents and
lied to Cabinet officials, to the public and to elected
representatives in Congress."  At year's end, Reagan reverted
to his policy of denying what he had previously admitted.
"Never at any time," he said, "did we view this as trading
weapons for hostages."

The Faithful Hussar

Among the other runners-up for Man of the Year would have to be
the figure at the center of the iran-contra scandal, though
there was some uncertainty about who that might be. Rear
Admiral John Poindexter, who had been forced to resign as the
President's National Security Adviser, testified that he was in
charge of the operation and that he had decided, for Reagan's
protection, not to tell the President all the details. But
there were many in Congress who doubted that the cautious and
rules-bound admiral would undertake such a risky venture on his
own. Some thought the key man must have been CIA Director
William Casey, but Casey developed brain cancer and died before
he could be questioned.

The nearest thing to a central figure, the, was marine Lieut.
Colonel Oliver North, who had organized both arms operations and
thought that combining them was a "neat idea."  North was a
can-do, much decorated veteran of Viet Nam. Though Reagan had
fired him from the National Security Council, he had also called
him a "national hero."  North became an overnight television
star when he appeared in his uniform and medals and began his
often emotional testimony by saying "I came here to tell you the
truth--the good, the bad and the ugly."  North admitted he had
engaged in international fund raising for the contras, a
campaign that included his staging slide shows for would- be
donors. Other officials cadged money from foreign millionaires
like the Sultan of Brunei (with characteristic adroitness, the
fund raisers temporarily lost the Sultan's $10 million donation,
which turned up in the wrong Swiss bank account).

North admitted he had shredded evidence and altered crucial
documents. He admitted he had repeatedly lied to the Congress:
"Lying does not come easy to me. But we all had to weigh in
the balance the difference between lives and lies."  The TV fans
loved him for the dangers he had passed. They rushed to buy
Ollie North posters, and a few even talked of his running for
President. That may be difficult if, as widely expected, North
is indicted in 1988 by Special Prosecutor Lawrence Walsh. By
now, the Olliemania of midsummer is little more than a distant
memory, and a California entrepreneur who lost $30,000 in unsold
Ollie dolls is converting his leftover inventory into Gorbachev
dolls.

The Determined Peacemaker

The basic idea behind financing the contras was to force major
concessions from the Sandinista regime, and perhaps to overthrow
it entirely. After much maneuvering in Washington, Reagan in
August announced his peace plan, which called for an immediate
cease-fire and required the Sandinistas to give up all Cuban and
Soviet-bloc aid, open negotiations with the contras, release all
political prisoners, restore civil liberties and hold elections
soon. Reagan was pleased to regard this as a bipartisan plan
because it had won the co-sponsorship of Democratic House
Speaker Jim Wright.

What is had not won, however, was the support of Central
America. The same week that the Reagan-Wright plan was
announced, the Presidents of five Central American nations
gathered in Guatemala City and signed a plan of their own. This
was largely the handiwork of Costa Rica's President Oscar Arias
Sanchez, a soft-spoken, stiffly formal politician who had taken
office only 15 months before. Arias labored quietly and
relentlessly to come up with a peace agreement that all the
region's combatants might endorse. Arias' plan was much easier
on the Sandinistas than the U.S. proposals had been, but it did
require a cease-fire in November, restoration of civil
liberties and a dialogue with all opposition groups once they
have laid down arms. Though the White House promptly criticized
the Arias plan as unenforceable and thus dangerous, his measure
undeniably superseded the Washington blueprint. Even Wright
abandoned Reagan and called U.S. demands on Nicaragua
"ridiculous."

For his efforts, Arias was awarded the Nobel Peace Prize. But
as he went to Stockholm to accept it in mid-December, he
received the unsettling news that Nicaraguan President Daniel
Ortega Saavedra had announced plans for a large military
buildup. Arias denounced the move as a violation of the
Guatemala accord. At about the same time, U.S. congressional
leaders approved a compromise measure to renew nonmilitary aid
to the contras through February. The contras, meanwhile,
launched what they called their biggest offensive of the war.
All in all, Arias' prizewinning peace plan was starting to
look shaky.

The Bear That Ate the Billions

One of the biggest elements in Reagan's landslide re-election
was the widespread belief that he had brought the U.S. a kind
of permanent prosperity. Reaganomics--which meant cutting taxes
and incurring deficits beyond anything John Maynard Keynes ever
dreamed--struck some experts as voodoo economics (as the future
Vice President George Bush christened it in 1980), but the boom
rolled on. A doubled national debt of more than $2 trillion?
Trade deficits of more than $15 billion a month?  What did that
matter, when inflation had been cut to about 4.5%, unemployment
to 5.9%, and the Dow Jones soared well over 2000?

Then came Oct. 19, Black Monday. The Dow Jones passed 2000 in
the other direction and went into a free fall, tumbling a record
508 points in one day. In that single trading session, half a
trillion dollars of wealth simply disappeared. And the crisis
came close to being an even worse disaster. With no buyers at
all for a number of major stocks at times during the day, there
was serious talk of shutting down the market entirely.

Memories of the great Crash of 1929 prompted considerable
anxieties about whether this new bear market would lead once
again to a major recession--or worse. As in 1929, many of the
experts declared that the economy was fundamentally strong and
predicted better times ahead. But the market recovered only a
fraction of its October losses, the record trade deficits
continued, and the dollar kept sinking. It was partly a
question of public confidence, and the ebullient optimism that
had helped to re-elect Reagan now appeared a thing of the past.

The Unstoppable Epidemic

One of the major stories of the year had no identifiable face,
no watershed event. Yet the AIDS epidemic was indisputably one
of the most important developments of 1987--as it was in 1986,
as it will be in 1988. Surely Reagan cannot be blamed for this
one too?

Not everyone would exonerate him completely. Year after year,
he asked for less money to fight AIDS than Congress eventually
voted, and not until this year did he devote a single speech
exclusively to the disaster. And as Randy Shilts wrote in a
widely praised 1987 book, And the Band Played On, governmental
indifference and inactivity played a major part in the alarming
spread of AIDS. As of mid-December, more than 48,000 Americans
had contracted the incurable disease--an increase of 20,000 for
the year--and more than half of those had died of it.

To deal with the epidemic, Reagan appointed a presidential
commission of 13 people, many with dubious qualifications.
After three months, the chairman, a doctor, resigned in
frustration and was replaced by an admiral. The commission's
final recommendations are supposed to appear next summer.
Beyond that, the Administration busied itself in imposing
compulsory AIDS tests on certain defenseless groups (federal
prisoners and would-be immigrants, for instance), a move that
compromised civil rights without accomplishing much of anything.
Gay rights groups excoriated the Administration for inactivity,
and the New york Times concluded that Reagan's lack of a
coherent policy on AIDS was "beyond comprehension or excuse."

The roughest year afflicted not only the First Family but also
several friends and followers. It was rough year for Reagan's
onetime close aide Michael Deaver, who was convicted of perjury;
a rough year for Attorney General Edwin Meese, under official
investigation on suspicion of corruption; a rough year for
Federal Judge Robert Bork, nominated to the Supreme Court but
humiliatingly rejected by the Senate. Well, time passes. Next
year at this time, Ronald Reagan can look forward to packing his
bags and heading westward into the sunset, just as he and his
fellow heroes used to do in Warner Bros. pictures. Out in Santa
Barbara. Calif., he can happily spend his days chopping wood and
telling stories about the good old days and, being an honest
man, the bad ones.

--By Otto Friedrich