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To take on the reagan mantle. "read my lips -- no new taxes." miklaszewksi: when ronald reagan left the white house in january, he also left george bush holding the bag -- filled with an assortment of staggering problems. bierbauer: when the president calls, some come running. all agree the savings and loan crisis is an urgent problem. brady: could the s&ls be bailed out without a tax increase? is there any other way to do it? i don't think there is, and i think that's becoming the conclusion of most people. pizzo: bush had to fill this smoking hole left by reagan for him, and the only way to ...

And they're all on the s&ls books. there's something wrong about the savings and loan industry today. and it isn't me. charles keating was a lawyer who got into banking and was able to buy a savings and loan. kroft: when keating bought lincoln savings and loan of irvine, california, he used it as a private piggy bank for his own ambitions, like the phoenician hotel, which cost $500,000 per room to build. that hotel is a magnificent investment for savings and loan's dollars. no question about it. the real problem is, when our appraisers looked at it, they said, "eh, it's not such a bad hotel, b...

The entire industry ultimately went belly up. well, get in line so we can have this -- i am in line! i'm next! quiet down! man: guys, quiet down! i'm going to disperse the whole bunch of you. mccarthy: this was the third day of the run on the old court savings and loan association. the only thing i can do at this point, i have no choice -- we have to close. i don't think it's right. that's our money. this year, a record 260 banks will go bust. that's almost 800 in the past five years. bad loans to the third world, bad loans to the oil industry, bad loans to real estate developers. nocera: one ...

We always do. it's just a question of when. my guess is it's probably 1989, rather than 1987. >> a little present for the new president. >> presidents always seem to manage to get that as their gift after the inaugurals. >> i promise you, if congress tries to raise taxes when i'm president, and you know they will, i'll say no. they'll try one more time and i'll say no. and if they try a third time, i'll stare them right in the eye and i'm going to say to them, read my lips. no new taxes! >> in 1988, george h.w. bush is running to take on the reagan mantle. read my lips, no new taxes. >> when r...

>> one of the reasons bankers made outrageous loans was because of federal deposit insurance. if the loan went well, you rake in the profit. if the loan went poorly, then the federal government picks up the tab. >> with deregulation, the s&ls got into that commercial real estate market and lost their shirt. >> all over the united states, people were building projects for which there were no buyers, mile after mile of these partially completed condos. and they're all on the s&l's books. >> there's something wrong about the savings and loan industry today, and it isn't me. >> charles keating was...