TIME: Almanac 1990/1990 Time Magazine Compact Almanac, The (1991)(Time).iso/time/caps/87/87capts.2

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"The Roughest Year"

January 4, 1988

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