It wasn’t. Mostly, 1991 was a bust. What defined it best was disappointment. We sobered up quickly from the euphoria of Desert Storm and stumbled through a hangover from the 1980s’ prolonged economic expansion. In government and business, moral squalor abounded: the Clarence Thomas-Anita Hill hearings, the Salomon Brothers trading scandal, the Keating Five and the BCCI mess. And there was yet a deeper source of our disillusion. Things that we thought (or hoped) were true turned out not to be.
Start with our victories in the cold war and the Persian Gulf. They were supposed to establish America as the world’s only genuine superpower. Well, maybe that’s what we are in some abstract geopolitical accounting game. Our economy is the world’s largest, our military the world’s mightiest. But as a practical matter, these “victories” undermined U.S. global leadership.
The cold war required alliances; that necessity is now gone. NATO remains, but its importance is almost certain to fade. Our pre-eminent military power rarely translates into practical political influence. The European Community defines itself independently of our views or interests. Its single market now has more consumers than ours (345 million people versus our 253 million). In 1991, the Community vowed to create a single European currency by 1999 and establish a broader “political union.” Japan, too, increasingly goes its own way.
Move next to the post-cold-war world. It’s hardly a paragon of good will or stability. The collapse of authoritarian rule has released ethnic hatreds. Yugoslavia is destroying itself in civil war. The shift from state-run to market economies has been jarring. Production has fallen 14 percent or more in Poland, Hungary and Czechoslovakia, reports the consulting firm PlanEcon. Economic and ethnic stresses rattle fragile governments. In Poland’s elections, 37 parties won seats in the parliament. The largest got 12 percent of the vote.
And Eastern Europe is calm compared with the Soviet Union. Inflation exceeds 200 percent. Production is in a “free fall,” says the Central Intelligence Agency. The scariest part is the possibility that, somehow, nuclear weapons would get loose from central control.
Finally, return home for the last disappointment: the strong economic rebound that was supposed to occur after the gulf war. It didn’t happen. You can blame this mainly on two things. First, consumers are rapidly reducing historically high debt loads. This restrains current spending. And second, industries that overexpanded in the 1980s-often as a result of high consumer spending-are contracting. In 1991, two major airlines, Eastern and Pan Am, went out of business. Advertising spending declined 1.5 percent, the first drop since 1961. The Dallas Times Herald and nine other daily papers shut down.
What’s disturbing is that all these setbacks may erode our ability to govern at home and lead abroad. This is not, however, because the economy is permanently crippled. Only one state (Massachusetts) now has a higher jobless rate than in the 1981-82 recession. Most states’ are much lower; Ohio’s rate was 13 percent in late 1982 and is now 5 percent. We are experiencing a wrenching transition to higher productivity and lower inflation. Much of the service sector (retail stores, banks, real-estate companies) is being slimmed down. It should become more efficient. Less inflation should reduce interest rates and promote productive investment. Corporate bond rates (8.3 percent for AAA bonds) haven’t been so low since 1977. Once consumers feel comfortable with less debt, the recovery should improve.
But even if this occurs, it won’t break the present political deadlock. What 1991 conclusively showed is that our society is vastly overcommitted. Health costs are oppressive; Medicaid is now the fastest-growing part of state spending and is increasing 20 percent annually, reports Steve Gold of the Center for the Study of the States. Despite spending cuts, 31 states raised taxes in 1991. Governments at all levels are caught between the demand for more services and less taxes. By itself, strong economic growth (which would increase tax revenues) cannot bridge this gap. We simply cannot afford everything we want.
The upshot is that our politics are growing more selfish and spiteful. They focus increasingly on rewarding friends and punishing enemies-and not pursuing a common good. Liberals have affirmative action and soak-the-rich taxes; conservatives have capital gains and welfare cuts. Economic frustration feeds another ugly trend: the rising preoccupation with race and ethnicity. David Duke and, in its extreme forms, “multiculturalism” foster social fragmentation. Both threaten “the idea of a common culture and a single society,” warns historian Arthur Schlesinger Jr.
The search for scapegoats afflicts the right and left. Jingoism appeals to both. Pat Buchanan suggests that foreign aid (1 percent of federal spending) is a serious source of national ills. Democrats lambast President Bush for traveling too much, as if staying at home would settle anything. “America First” is a wonderful slogan, because it obscures the reality that most of our conflicts are between Americans. But mindless nationalism hobbles farsighted foreign policy. Europe and Japan suffer the same self-absorption. Little wonder we have all done so little to check rising Soviet anarchy.
At its end, 1991 leaves us awash in self-doubt. We wonder about our social cohesion at home and our role abroad. It’s a troubling legacy. Are we distracted from the year’s great gains by momentary frustrations? Or do these frustrations signal the onset of a period of more insecurity and disorder? These are good questions for 1992-and perhaps many more years.
