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LymphocyteLover

(5,967 posts)
1. Interesting but I have no idea.
Tue Jul 28, 2020, 09:39 PM
Jul 2020

Nixon was president and the Vietnam war was raging.

From google--
The Nixon shock was a series of economic measures undertaken by United States President Richard Nixon in 1971, in response to increasing inflation, the most significant of which were wage and price freezes, surcharges on imports, and the unilateral cancellation of the direct international convertibility of the United States dollar to gold.

Response to LymphocyteLover (Reply #1)

irisblue

(33,188 posts)
3. Minimum wage was $1.60/hr
Tue Jul 28, 2020, 09:57 PM
Jul 2020

UAW contract was up in 70, strike against GM was 2 + months

Source-- https://www.npr.org/templates/story/story.php?storyId=14720112 snip--The last time the United Auto Workers called a nationwide strike against General Motors was in 1970. That strike lasted 67 days, triggering layoffs at parts suppliers and steel companies and dominating headlines.


USPS had a wildcat strike in 1970, less then 2 weeks


West Coast Canada & US LongshoreWorkers strike in 1971, over 4 months

hunter

(38,586 posts)
12. The first time I made more than $100 in a day was moving furniture.
Tue Jul 28, 2020, 11:04 PM
Jul 2020

I worked my ass off into triple overtime, but still, $100.

That was four decades ago.

Gasoline was cheap. Rents were low. I graduated from college without loans.

That's not the world my children grew up in and they are not nearly so lazy or as crazy as I am.

Snake Plissken

(4,103 posts)
4. The Nixon shock, a series of economic measures undertaken by Nixon in 1971, in response to inflatin
Tue Jul 28, 2020, 09:57 PM
Jul 2020
https://en.wikipedia.org/wiki/Nixon_shock


The Nixon shock was a series of economic measures undertaken by United States President Richard Nixon in 1971, in response to increasing inflation, the most significant of which were wage and price freezes, surcharges on imports, and the unilateral cancellation of the direct international convertibility of the United States dollar to gold.

While Nixon's actions did not formally abolish the existing Bretton Woods system of international financial exchange, the suspension of one of its key components effectively rendered the Bretton Woods system inoperative. While Nixon publicly stated his intention to resume direct convertibility of the dollar after reforms to the Bretton Woods system had been implemented, all attempts at reform proved unsuccessful. By 1973, the Bretton Woods system was replaced de facto by the current regime based on freely floating fiat currencies.

Response to Snake Plissken (Reply #4)

Response to hunter (Reply #7)

JHB

(37,194 posts)
11. The Powell Memo (first published August 23, 1971)
Tue Jul 28, 2020, 10:42 PM
Jul 2020

Initiated the building of the RW media machine, marked the corporate shift from reluctant adapting to active resistance to environmental and labor regulations with intent to undermine the forces spurring those regulations, and laying the foundations for turning "I got mine, f*** you" economics into a virtue.


https://reclaimdemocracy.org/powell_memo_lewis/

In 1971, Lewis Powell, then a corporate lawyer and member of the boards of 11 corporations, wrote a memo to his friend Eugene Sydnor, Jr., the Director of the U.S. Chamber of Commerce. The memorandum was dated August 23, 1971, two months prior to Powell’s nomination by President Nixon to the U.S. Supreme Court.

The Powell Memo did not become available to the public until long after his confirmation to the Court. It was leaked to Jack Anderson, a liberal syndicated columnist, who stirred interest in the document when he cited it as reason to doubt Powell’s legal objectivity. Anderson cautioned that Powell “might use his position on the Supreme Court to put his ideas into practice…in behalf of business interests.”

Though Powell’s memo was not the sole influence, the Chamber and corporate activists took his advice to heart and began building a powerful array of institutions designed to shift public attitudes and beliefs over the course of years and decades. The memo influenced or inspired the creation of the Heritage Foundation, the Manhattan Institute, the Cato Institute, Citizens for a Sound Economy, Accuracy in Academe, and other powerful organizations. Their long-term focus began paying off handsomely in the 1980s, in coordination with the Reagan Administration’s “hands-off business” philosophy.

Most notable about these institutions was their focus on education, shifting values, and movement-building — a focus we share, though often with sharply contrasting goals.* (See our endnote for more on this.)

Xolodno

(6,520 posts)
13. In a word. Inflation.
Tue Jul 28, 2020, 11:14 PM
Jul 2020

Inflation will fuck your economy up, something fierce. Then piss on you as insult to injury. And its never felt initially, but just like walking in what you think is a safe and familiar dark alley, out of nowhere, you get mugged.

Wages adjust and move slowly. In a salaried position, you get a review once a year and your pay increases if your lucky, 3%. If inflation is 10%...you are actually making 7% less. Hourly wages, businesses resist raising wages in order to keep a competitive edge, its the one cost they can control. Inputs (i.e. supplies to make your product)...not so much.

Prices of goods and services however, adjust rapidly. To compensate, the middle class, which was a one person working home....became a two person. Add the fact the minimum wage wasn't adjusted, etc.

Being on the gold standard of course, became a major liability. Every country in the world wanted US Currency in their National Bank Reserves...why not, it was backed in gold!

Funny thing is, Keynes proposed an international fiat currency to be exchanged between governments only. Had it been implemented, inflation would have been managed. However, the USA was having none of that. After WWII we were in perfect position to be the currency of choice around the world....which also meant, our banking laws were the worlds banking laws. We would have near absolute authority on influencing a country's economic and trade policy. Ironically, the USSR went to a form of fiat currency and thus, we had no influence there. To purchase goods abroad, they had to pay in gold.

But, like our interference in Iran, Afghanistan, making sure a nobody politician called Putin became the Russian President, etc. It eventually came around to bite us in the ass due to short term thinking.

This is why run away inflation is so freaking dangerous. It creates income inequality and will eventually destroy the economy. Nixon did some correct initial economic changes...albeit, very late. Hell, price controls were being openly debated, unheard of now (and of course would lead to Soviet style good shortages). But Ford didn't do jack shit. And Carter walked into a situation that no matter what he did, was going to make him a one term President if he implemented sever economic changes...of course, other shit around the world did him in anyway. He would have to fully implement Keynesian economic policies to get out of the mess. But it was going to hurt domestically for awhile....and it would mean we would lose some serious influence around the world...and given the Cold War, it was heresy to think that. Maybe Carter planned on doing so anyway if he got a second term, or only go part way in the hopes it would alleviate the issue for a time and leave it for someone else, who knows.

Then Reagan and Volkner came around....and purposely plunged the USA into a deep recession in order to force it to reset the economy. After that, they abandoned the hybrid Keynesian-Free Market system...and instead of going full Keynes...they adopted Milton Friedman's Monetarist theory. Having the Fed Reserve taking a more active approach in managing the economy. Got to hand it to them, they had some serious brass balls.

And it seemed to work initially....shit, I used to be big fan of Monetarism. But I don't follow ideology, I prefer the science. Granted it took some time, but Monetarism has resulted in greater income inequality, three separate bank bail outs and possibly a fourth on the way. So now I say, Fuck It. Lets go Socialist Lite.

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