George Bush believed that the former Soviet Union could become an ally, and that if the Cold War ended, American taxpayers would no longer have to finance the military might it had necessitated. Thus, Bush helped edge the Soviet leader toward democracy. As the Berlin Wall separating Communist East Berlin from capitalist West Berlin fell in November 1989, Bush showed restraint rather than gloating over the event. He talked of “a new world order” to replace the former relations between the two superpowers.

Bush gravitated toward foreign affairs rather than many domestic initiatives. In 1989, Manuel Noriega, the Panamanian president indicted in the United States for drug trafficking, nullified a presidential election that had swept him out of power, even after U.S. observers insisted he had lost. Critics pointed to the fact that Noriega had been an agent of the Central Intelligence Agency (CIA) while President Bush had been the agency's director. Bush sent troops to Panama to assist in a coup against Noriega. The invasion lasted only days and resulted in Noriega's capture and return to the mainland, where he was convicted in Miami, Florida, on drug and racketeering charges in 1992.

Tensions in Iraq, however, demanded much of Bush's attention as Iraqi leader Saddam Hussein launched an offensive on neighboring Kuwait in August 1990. The tiny nation, governed by a sheik, held 10 percent of the world's oil reserves. President Bush mounted an unprecedented global alliance against the Iraqi assault, trying to protect the largely defenseless nation, but also to prevent future Iraqi conquests. Saudi Arabia, home to another 25 percent of the world's reserves, bordered Saddam's forces. It was too close for comfort for many in the Western world. If Saddam Hussein, a headstrong leader at best, ordered another attack, he would control almost half of the world's oil.