Reagan’s campaign of optimism ultimately trumped the doom and gloom of the Democrats. The Republican ticket took 58.8 percent of the popular vote, but its margin in the electoral college was even more lopsided. Winning every single place except for Mondale’s home state of Minnesota and overwhelmingly Democratic Washington, DC, Reagan won a staggering 525 electoral votes out of a possible 538. Democrats found a slight silver lining by retaining control of the House, but the election proved to be a major victory for the GOP. The Reagan Revolution, it seemed at last, had claimed control of the country. When Reagan walked into the Century Plaza Hotel to find a raucous crowd of supporters chanting “Four More Years,” he flashed a grin and joked, “I think that’s just been arranged.” “You know, so many people act as if this election means the end of something . . . To each one of you I say, tonight is the end of nothing, it’s the beginning of everything.” 61
From the perspective of conservatives, Reagan’s election and reelection had represented nothing less than a revolution that toppled the old order. The president had brought together the various factions of the conservative movement and, together, they had pushed political debate sharply to the right. In some areas of domestic policy, such as passing tax cuts or weakening federal agencies, Reagan had scored some important successes that reversed the momentum of politics for the first time since the New Deal. But in other areas, it quickly became clear that Reagan’s presidency had not represented a revolution at all. Despite his promises to dismantle the welfare system and the regulatory state, by the end of his two terms both largely remained intact. And though he had announced his intention to cut federal spending and federal payrolls, both actually increased dramatically on his watch. Some of the hike in federal spending was linked to the ballooning military budget, but a significant portion came from interest payments on all the debt piled up in Reagan’s deficits.
The halfway revolution of the Reagan years ultimately revealed that Americans were still ambivalent in their political leanings. In principle, many agreed with the arguments advanced by the Great Communicator about the need to reduce the role of government in their lives; but in practice, Americans had grown accustomed to the programs and policies the president sought to end. Even as they voted for him, many of his supporters continued to send Democrats to the House and Senate. If anything, Reagan’s rhetorical assault on the role of government had energized many liberals who had long been searching for a sense of direction and a common opponent.
Accordingly, Reagan’s second term began with a new focus on smaller pieces of legislation and bipartisan deals that could make it through the increasingly liberal House. In 1985, for instance, Congress passed the Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act, which technically mandated a balanced budget. The following year, Reagan worked with Democrats to enact the Tax Reform Act of 1986, which lowered the rate structure in exchange for closing a number of loopholes that had long favored powerful interests. He also worked with Congress to pass the Immigration Reform Act of 1986, cosponsored by Wyoming Republican Alan Simpson and Kentucky Democrat Romano Mazzoli, which allowed undocumented immigrants who had been in the United States since 1982 to obtain temporary legal status. The Census Bureau reported that there were somewhere between three and five million undocumented immigrants in the United States. If they were able to learn English, they would be eligible for green cards after eighteen more months in the country. The law imposed stronger surveillance technology at the border with Mexico and implemented new federal sanctions on businesses that hired undocumented workers, but enforcement was toothless; the bill continued to allow for the massive influx of migrants from other countries. “The bill is a gamble,” said New York Democratic representative Charles Schumer, “a riverboat gamble. There is no guarantee that employer sanctions will work or that amnesty will work. We are headed into uncharted waters.” 62
As the country set off on that gamble, other bets came up short. From the start, the biggest winners of the age of Reaganomics had been wealthier Americans who benefited from regressive tax cuts that brought down their rates dramatically. The income of the top 20 percent of families grew by about $10,000 a year; the income of the lower 20 percent steadily declined. As the decade wore on, the promises of the supply-siders—that tax cuts for the wealthiest would trickle down to benefit Americans across the economic spectrum—simply failed to come true. “Supply-side economics was supposed to promote savings, investment, and entrepreneurial creativity,” historian Garry Wills noted. “It failed at all three.” Indeed, those at the bottom and middle levels of the economy actually found themselves struggling more and more. Working-class Americans without a high school degree saw a 6 percent drop in an average week of earnings between 1980 and 1990. Median family incomes, adjusted for inflation, had grown from the late 1940s to the mid-1970s, but now proceeded to fall. Economic insecurity increasingly became commonplace. Just in 1985, over 12 percent of the country had suffered through an economic loss severe enough to categorize them as being financially at risk. At the end of the decade, Kevin Phillips, the Republican strategist who had helped usher in Nixon’s Silent Majority, offered a cold reckoning for Reaganomics in a study titled The Politics of Rich and Poor. The “capitalist blowout” policies of the Republicans, Phillips concluded, had ushered in “a second Gilded Age,” one in which “many Americans made and spent money abundantly” but far too many more were left behind. “By several measurements,” he noted, “the United States in the late twentieth century led all other major industrial countries in the gap dividing the upper fifth of the population from the lower—in the disparity between top and bottom.” 63
Even many of the apparent winners of Reaganomics came tumbling down over Reagan’s second term. The financial and business sectors had moved into high-risk investments as old regulations were weakened and new opportunities arose. A new generation of financial stars dominated the news. Investment bankers like Michael Milken at Drexel Burnham Lambert made millions in high-yield “junk bonds,” while Ivan Boesky gained fame through a series of aggressive corporate takeovers. The high-stakes speculative spirit of the era was captured well in Oliver Stone’s film Wall Street (1987), where the slick villain Gordon Gekko—in a speech inspired by real comments by Boesky—proudly proclaimed that “greed, for lack of a better word, is good.” Soon, however, these financial stars fell from grace; by decade’s end both Boesky and Milken had been sentenced to jail for insider trading schemes.64 Meanwhile, the stock market as a whole lost much of its earlier allure. On October 19, 1987, a global market crash—known as “Black Monday”—hit Wall Street with the worst single-day losses since the Depression.
Despite the Reagan Revolution’s promises to cast off the tired old rules of a rigid federal government and unleash the innovation and energy of the private sector, the revolution—like all revolutions—had inspired as much chaos as it had creativity. The economic initiatives of the Reagan era had sparked uncertainty and, in the case of the insider traders, illegality, and led even the revolutionaries themselves to roll back their initial efforts and undo much of the original tax cut. The campaign to curtail the federal government had a similarly mixed record of success, with administration appointees succeeding in limiting the reach of some agencies but other programs, like Social Security, emerging from the struggle even stronger than before. The Reagan Revolution, it seemed, was a halfway revolution, but its influence wasn’t over yet.
CHAPTER 7
Changing Channels
WHILE CONSERVATIVES STRUGGLED TO PROMOTE THEIR values and their vision of America, powerful commercial and cultural forces were transforming the country in ways that dwarfed even the Reagan Revolution. New developments in technology and telecommunications signaled massive revolutions in media that promised both to bring Americans together and, paradoxically, drive them further apart.
The late 1970s and 1980s had witnessed the dawn of a new era in telecommunications, one that fundamentally changed the ways
in which Americans interacted, consumed popular culture, and even conducted their politics. Over most of the twentieth century, the trend had been toward consolidation of communications outlets. At the start of the 1970s, the institutions of American mass media had long been centralized into a small, insular establishment. Three major networks dominated television; a small number of movie studios controlled the film industry; a handful of major cities’ papers shaped the national news. Personal communication, meanwhile, still took place through the mail, largely the US postal system that had been established in the eighteenth century, as well as through landline telephones that were dominated by a single provider, AT&T.
This all changed with the rise of cable television, personal computers, and the internet. While ownership continued its path toward consolidation, the variety of media options and outlets available to consumers rapidly proliferated. The new technology simultaneously reshaped the experience of all Americans, diminishing the regional differences in the lives of people who all depended on similar modes of interaction, while also fragmenting life by offering more individual choices and a variety of targeted cultural content. Ultimately, the emerging media created a new common public square, but one that was internally divided, rapidly changing, and ultimately uncontrollable. Cable TV and computers brought more Americans into a shared media ecosystem, but that development only served to speed the growing divisions in politics, economics, society, and culture because that shared space was in fact deeply fractured.
Multiple Channels
Cable television provided a stark example of these changes. From the 1950s through the 1970s, the “big three” broadcast networks—ABC, NBC, and CBS—ran television as an oligopoly. Local stations relied on expensive landlines to broadcast their shows; those landlines, in turn, were controlled by the telephone monopoly AT&T. The phone giant cooperated with the three networks to maintain their mutual advantages, giving them significant discounts on landline prices, such that smaller companies could never afford to enter the market as competitors. Public policy also supported the dominance of the television networks, as regulators at the Federal Communications Commission (FCC) maintained anticompetitive policies that protected them. AT&T pressured legislators and the White House, wielding influence through campaign contributions, to prevent the use of satellites that would serve as a cheaper way of disseminating programming.
Over the course of the 1970s, however, the foundations of this monopoly steadily eroded. First, the deregulation movement built political support for changing these kinds of practices. Conservative free-market economists allied with liberal consumer advocates like Ralph Nader to push back against federal regulations that had, in this instance, actually benefited the regulated entities and stifled consumer choice. Congress responded by loosening the restrictions on competition. During the Nixon administration, the White House Office of Science and Technology promoted these changes, and the FCC responded by lowering the barriers to the market. As the industry opened, Western Union and RCA jumped into the competition in 1974 and 1975. The new satellites they purchased could transmit shows to televisions without the landlines owned by AT&T; as a result, independent stations could use them to transmit programming.
As more stations used satellites to get on the air, cable television flourished. Originally, cable had been a system to deliver television to remote rural areas which were unable to receive a standard broadcast television signal. Cable offered an alternative to these communities in the 1960s. In Huntsville, Alabama, an advertisement promised that “TV Cable” would bring viewers “Clear, Snow-Free TV” without “unsightly antennas, costs, and repairs” so that they could see the three major networks.1 To deliver on that promise, enterprising individuals in isolated communities placed an antenna in a high area and then literally ran a cable through neighborhoods to provide coverage in individual homes. In northwestern Oregon, for instance, radio engineer Ed Parsons started experimenting with the technology when he couldn’t receive a signal for the television set he bought his wife in their home in Astoria, over a hundred miles from Seattle. His solution was to put a huge antenna up high on a mountain and run a coaxial cable to their home. “People would drive for hundreds of miles to see television,” he recalled.2 Others went to even greater lengths. In Williamsport, Pennsylvania, for instance, Robert Genzlinger hooked up over 11,000 televisions to a cable system. John Walson Jr., an appliance store owner in nearby Mahanoy City, soon started his own cable television company, charging local residents $100 for installation and then $2 a month for the service.3
By the late 1970s, cable television was no longer simply a means for reaching rural residents. In 1979, cable systems were located in over 4,000 communities nationwide, with one-fifth of the national television audience, a little over 14 million homes, receiving programming through them. Initially owned by individual operators, many of these systems were purchased in the early 1980s by major companies like the American Television and Communications, Inc., a subsidiary of Time, Inc., as well as Times Mirror, Westinghouse, Warner-Amex, and more. With corporate control, cable’s reach across America rapidly expanded. By 1981, 30 percent of US households had cable, with roughly 250,000 new subscribers every month. By 1987, cable covered 48 percent of all television households, 42 million subscribers in all. Cable was earning $12 billion, up from $2.6 billion seven years earlier.4
Cable systems represented a distinctly new and decidedly different kind of television. They brought together a number of independent channels that provided subscribers with a variety of programs previously unseen on the networks. Most systems in the early 1980s had a dozen channels, while some had three times as many. In an important innovation, these channels were offered to consumers in combination packages that allowed individual subscribers to tailor television to their own personal tastes. Religious broadcasting, such as Pat Robertson’s Christian Broadcasting Network (CBN), emerged as a popular early genre. Premier stations, meanwhile, could be purchased separately. Home Box Office (HBO) was an early pioneer. At a time when few executives believed that viewers would ever pay for television, the station hoped to capitalize on its unique ability to present feature films or special sporting events free from commercial interruptions.5 It worked. By 1981, after nine years of operation, HBO had roughly six million subscribers nationwide.6
One of the first stations to take advantage of the new cable technology was the Entertainment and Sports Programming Network, Inc. (ESPN). William Rasmussen, the communications director for the New England Whalers pro hockey team, had been searching for a way to broadcast the team’s games across the state of Connecticut. He looked into a number of local options, but in 1978 he discovered he could actually create a national network for the same price. The newly launched RCA satellite, he learned, had been largely ignored by major broadcasters and desperate officials at RCA “would talk to anybody” to fill the unused transponders. Rasmussen secured an early license from the FCC and, with that edge, landed $10 million in funding from Getty Oil. Signing contracts with NCAA teams and the LPGA, the fledgling ESPN announced bold plans to launch a channel devoted entirely to sports broadcasts. “I know it’s a bold, kooky, wild approach,” Rasmussen told a reporter, “but it’s a logical vehicle. There’s a stock market channel. So why not all sports?” ESPN debuted in September 1979, with an estimated four million subscribers. The network began small, but had its sights set high. “The potential is enormous,” enthused ESPN president Chester R. Simmons. “I can foresee the day when we’ll be outbidding networks for things like NFL football and other sports. It’s not impossible. Not at all.” 7
Another early pioneer was the Cable News Network (CNN). This channel was the product of Atlanta entrepreneur Robert “Ted” Turner III, the son of a prominent billboard businessman who entered the family business after a career sailing yachts around the globe. In 1970, Turner invested in WTCG-TV, a small television station in Atlanta that operated on the Ultra High Frequency (UHF) used to broadcast non-network channels
in urban areas. In his new role, he quickly grasped the potential opportunities that satellite technology offered smaller television stations to reach broader audiences and stand alongside more established channels as an apparent equal. Accordingly, he reinvented his station, rebranding it as WTBS and using it to broadcast games of the Atlanta Braves to national audiences. Turner owned the team as well, having bought it for the bargain price of $10 million after a disappointing 1975 season dropped attendance to new lows. The Braves offered Turner cheap programming for 162 days out of the year; he broadcast games live each night for three or four hours and then replayed them the following morning. As profits from the new “Superstation” grew, Turner bought the Atlanta Hawks basketball team, airing their games as well. Despite the odd mix of sports and old sitcoms, WTBS quickly carved out a national audience. Within six years, the new cable station reached 26 million homes.8
As he sought to start a second cable network, Turner looked for unmet markets. “There are only four things that television does,” he told a potential partner in the fall of 1978. “There’s movies—and HBO has that. There’s sports—and now ESPN’s got that, unfortunately. There’s the regular series kinda stuff—and the networks do that. All that’s left is news.” Hoping to pioneer a new direction in cable news, Turner joined forces with Reese Schonfeld, who had made early forays in the field through his work at the Independent Television News Association. Hearing Turner’s initial ideas, Schonfeld found himself impressed by his daring. “For anyone to take a shot at this represents a commitment beyond all reason,” he later told a reporter. “It’s an act of faith—and an act of genius.” 9
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