Exactly one year ago, Americans had reason to celebrate the advent of the 1990s. The Cold War was over, and global peace seemed a real possibility. At home, the president was popular and the economy, if not booming, was still running fairly smoothly. It even seemed possible that the budget deficit might be significantly reduced.
Yet for all its promise, this was a year when anxiety replaced euphoria, when the threat of simultaneous war and recession dissipated hopes for continued peace and prosperity, and when the rekindling of old conflicts dashed visions of a more promising world order. Not for decades has there been such a roller coaster of a year, nor one that produced such unease about the future.
Evidence of a sharp shift from optimism to pessimism abounds. When asked the standard question used to gauge national attitudes, 75 percent of Americans polled now say they think the country is "on the wrong track."
Last December the Conference Board's consumer confidence index, the standard such measurement, stood at 113; now it has sunk to a historically low level of 61.3. Last week the government reported that factory orders had plunged 10.5 percent, equaling a record set 32 years ago. Last December's concern about the final cost of the savings and loan cleanup has grown during the year into fears about the safety of the nation's banking system itself.
As 1990 passed its midpoint, bad economic news became the norm. Real estate sales were off sharply nationwide. Unemployment rose, growth slowed, and corporate profits plummeted. Although the end of the "Reagan Boom" -- the longest such period in the nation's history -- had been long predicted, it came with what seemed startling speed to many Americans. The economic excesses of the '80s -- not least the credit card spree and corresponding accumulation of debt -- collided with the more somber conditions of the new decade and came to an abrupt end. Its demise was symbolized by the 10-year prison sentence a federal judge gave to junk bond wizard Michael Milken in November.
The United States begins the new year facing daunting domestic challenges over how to raise and allocate public funds made ever scarcer by recession. Instead of shrinking, the national debt continues to rise, and the budget problems were merely papered over in an uneasy and doubtless unlasting political compromise.
Making the choices more difficult are the absence of clear national consensus and the prospect of greater political division when the new Congress convenes this week. The popularity of the president -- once the highest ever recorded at a comparable point in a presidential term -- now is noteworthy only for how much it has fallen in recent months.
The sense of uneasiness at home has been compounded by the extraordinary change in conditions worldwide, as old national, ethnic, racial and religious animosities have reemerged.Age of the Dictator Over
It was only a year ago that dramatic international events had inspired optimistic predictions that "the end of history" had arrived, bringing resolution of such ancient problems. The Berlin Wall had crumbled, the Iron Curtain was breached, communism had collapsed. Around the globe, spontaneous outpourings of people demonstrating for democratic values in Beijing, East Berlin, Warsaw, Budapest, Prague and Bucharest had affirmed belief in the United States as the world's leading symbol of democracy.
The Age of the Dictator was over, the president of the United States had proclaimed. Events indicated this was so.
In Panama, dictator Manuel Antonio Noriega eventually surrendered himself to invading U.S. forces, was brought to the United States in manacles, charged with drug-dealing and placed behind bars. In Romania, the last of the East European despots, Nicolae Ceausescu, was overthrown and executed by his own people. In Nicaragua, 10 turbulent years of warfare were ending with the leftist Sandinista regime about to be voted out of power by a landslide in the first free and broadly contested election in that nation's history.
Nowhere were signs of peaceful change more dramatic than in the Soviet Union and its disintegrating empire. After nearly half a century of ideological struggle, the United States was clearly the victor. Soviet President Mikhail Gorbachev was moving swiftly to institute democratic reforms and replace the discredited communist economic system with a free market economy.
Americans watched in awe as a workman in overalls rose on a soap box in Prague and began reciting the words of the U.S. Declaration of Independence. They watched and listened, courtesy of satellite-transmitted live television pictures, as throngs of men, women and children filled the central squares of East European capitals and, holding lighted candles, sang in various languages the American civil rights anthem, "We Shall Overcome."
Nothing in a lifetime had prepared people for the spontaneity and majesty of these stirring scenes. In his latest novel, "Rabbit at Rest," John Updike has his doomed hero wonder aloud to friends about the sudden transformation of the communist world:
"How about those elections in Poland?" he says. "Voting the party out -- who ever would have thought we'd live to see the day? And Gorby telling all the world the contractors who put up those sand castles in Armenia were crooks? And in China, what's amazing isn't the crackdown but that the kids were allowed to run the show for a month and nobody knew what to do about it! It's like nobody's in charge of the other side any more. I miss it," he says. "The Cold War. It gave you a reason to get up in the morning."
Today, as another New Year nears, nothing on the world scene appears as awesome or promising.
The Soviet empire, facing explosive internal problems, teeters on the edge of civil war as the bonds holding together its republics continue to weaken and its economic woes intensify. Gorbachev, moving to his right, amasses more personal power even as his progressive foreign minister Eduard Shevardnadze resigns dramatically and warns ominously that a new dictatorship nears. Further adding to the chill is the specter of renewed Cold War fervor as the KGB chief publicly employs menacing old rhetoric to accuse the West of attempting to undermine Soviet society.
Throughout Eastern Europe, and in newly reunited Germany, yesterday's soaring hopes have been replaced by recognition of sobering realities. Everywhere, it is apparent that the process of moving from a stagnant, socialist past into a democratic, capitalist future will be far more formidable than it once seemed. Staggering financial costs are involved. Necessary funds are not readily available.Military Outlook Altered
Perhaps even more difficult is the change in attitudes that must occur if dreams for freer, more prosperous societies are to be fulfilled.
Incidents of antisemitism are increasing. So are strains of nationalism, and reports of neo-Nazism in Germany. In Armenia and Azerbaijan, among the Serbs and Croatians, the Arabs and Jews, the Moslems and Christians, there are signs that the tensions that plagued the 20th century still smolder and at times flare into open conflict.
For Americans, these remained distant alarms, removed from the concerns of everyday life. But any illusions they had about the predictability, if not stability, of national and world events were suddenly shattered last summer.
Overnight, and without warning, a new dictator branded by President Bush as "another Hitler" arose in August to dominate American thoughts and actions. Iraq's Saddam Hussein, a name previously unknown to many, instantly became the nation's arch enemy and fomentor of a prospective war for which a deadline approaches with seeming inexorable inevitability.
Operation Desert Shield, the deployment of nearly half a million U.S. combat forces to the Persian Gulf, has altered fundamentally the nation's military and economic outlook. At year's end, this vast buildup is still in progress and American troops are poised for combat on the desert sands of Saudi Arabia. Arrayed against them is an equally vast Iraqi force possessed with chemical and biological weapons and the missiles to carry them into Saudi territory or beyond.
The Iraqi crisis has taught hard lessons. It has raised questions about the lack of a coherent overall U.S. strategy for the Middle East, and demonstrated anew that the United States remains vulnerable to Middle East hostage-taking.
But it also has brought full circle the consequences of the nation's failure to resolve its domestic problems. The unexpected new costs of the Persian Gulf crisis have struck as the federal treasury is under the severe constraints of recession and the escalating savings and loan cleanup that already had virtually eliminated any hoped-for economic "peace dividend" resulting from the end of the Cold War.
Within two months of Iraq's Aug. 2 invasion of Kuwait, the price of crude oil had nearly doubled to $40 a barrel, triggering fears about availability of critical Mideast oil reserves, and speeding the fall of consumer and business confidence.
And the shadow of Iraq looms over the existing tensions between the branches of the American government, exacerbating the lack of consensus on a host of domestic issues that marked 1990. The New Year is set to begin with an argument between Congress and the president over which has the constitutional power to authorize a war, giving Americans a new reason to wonder where the country is heading.
Staff writer John M. Berry contributed to this article.