1064 ★ CHAPTER 26 The Triumph of Conservatismto get rich. The merger of Nabisco
and R. J. Reynolds Tobacco Company
in 1988 produced close to $1 billion
in fees for lawyers, economic advisers,
and stockbrokers. “Greed is healthy,”
declared Wall Street financier Ivan Boe-
sky (who ended up in prison for insider
stock trading). “Yuppie”—the young
urban professional who earned a high
income working in a bank or stock
brokerage firm and spent lavishly on
designer clothing and other trappings
of the good life— became a household
word.
Taxpayers footed the bill for some
of the consequences. The deregulation
of savings and loan associations— banks
that had generally confined them-
selves to financing home mortgages—
allowed these institutions to invest in
unsound real- estate ventures and cor-
porate mergers. Losses piled up, and
the Federal Savings and Loan Insurance
Corporation, which insured depositors’
accounts, faced bankruptcy. After Rea-
gan left office, the federal government
bailed out the savings and loan institu-
tions, at a cost to taxpayers estimated at
$250 billion.
Supply- side advocates insisted that lowering taxes would enlarge govern-
ment revenue by stimulating economic activity. But spurred by large increases
in funds for the military, federal spending far outstripped income, producing
large budget deficits, despite assurances by supply- siders that this would not
happen. During Reagan’s presidency, the national debt tripled to $2.7 tril-
lion. Nonetheless, Reagan remained immensely popular. He took credit for
economic expansion while blaming congressional leaders for the ballooning
federal deficit. He won a triumphant reelection in 1984. His opponent, Walter
Mondale (best remembered for choosing Congresswoman Geraldine Ferraro
of New York as his running mate, the first woman candidate on a major- party
presidential ticket), carried only his home state of Minnesota and the District
of Columbia.Loosely modeled on the French artist Eugène
Delacroix’s famous 1830 painting Liberty Leading
the People (reproduced at the lower left), this
campaign poster from 1984 depicts Geraldine
Ferraro, the first woman nominated for vice pres-
ident by a major party, as a modern- day rebel.
She overshadows the Democratic presidential
candidate, Walter Mondale, shown carrying a
rifle emblazoned with “ERA,” for the Equal Rights
Amendment.