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WTF Happened in 1971? (2019)

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Re: WTF Happened in 1971? (2019)

#51

Post by anovikov »

bryanlarsen wrote: post #25

The author obviously wants you to believe that it was the abandonment of the gold standard, but there are several other theories that have more credence with mainstream economists. The early 70's was the start of a horrible period of stagflation: stagnation coupled with inflation. Some do blame the loss of the gold standard, but the leading theory is the OPEC oil crisis. Others blame market regulations, the EPA was p…

Why do you think it has something to do with production? It may be simply redistribution. Less goes to employees, more to profits. Just because they stopped fearing a Communist revolution much as Communism was more and more evidently failing.

Re: WTF Happened in 1971? (2019)

#52

Post by topspin »

lokar wrote: post #18
ZacharyPitts wrote: post #10

Amazed that the site does not call out Nixon completely abandoning the gold standard in 1971. Financial investments thusly did not need to be backed by actual assets anymore, to the point of today where the whole of money is loans against loans against loans.

That theory would explain financial gains going up faster (eg the pie getting bigger, more return to capital), but not a stall in wages for workers. Worker productivity went up, but wages for workers did not. ~1970 is about when the % of workers in unions really started to fall in the US.

~1970 was the beginning of the rapid growth of commercial intermodal containerization. A couple of WTO charts in this[1] document show the trend. The US military pioneered standardized containers (for shipping supplies to S. Vietnam) in the late 1960's and the commercial world caught on very quickly.

Since then the captains of industry in the West have been able to arbitrage labor world wide. Thus labor unions in developed nations, a symptom of labor scarcity, lost their leverage.

[1] http://minotusa.com/uploads/40/NorthDakotaIntermodalInitiati...

Re: WTF Happened in 1971? (2019)

#53

Post by throwaway0a5e »

icameron wrote: post #24

A lot of charts with no context, but my main takeaways are that the US is not in record debt, in fact it was well over 100% GDP in WWII and under that now. Based on the news you'd think US is over spending by records numbers. The numbers are records but as a percentage of GDP they are not. Another surprise is the S&P PE ratio. I thought it was really high now, but actually 2008 was the high point by about twice as mu…

>in fact it was well over 100% GDP in WWII

You can't win a war with sustainable budgeting.

If you have to use WW2 to prove that the national debt wasn't bad than that's probably a sign it's bad.

Re: WTF Happened in 1971? (2019)

#54

Post by djur »

The "hyperinflation episodes" graph is pretty misleading. That big clump in 1991 marks the collapse of the Soviet Union, and as much as he would have liked it, I don't think you can credit Nixon's withdrawal from Bretton Woods as the cause of the fall of the USSR.

Re: WTF Happened in 1971? (2019)

#55

Post by mymythisisthis »

bryanlarsen wrote: post #25

The author obviously wants you to believe that it was the abandonment of the gold standard, but there are several other theories that have more credence with mainstream economists. The early 70's was the start of a horrible period of stagflation: stagnation coupled with inflation. Some do blame the loss of the gold standard, but the leading theory is the OPEC oil crisis. Others blame market regulations, the EPA was p…

Demographics.

WWII ends, you get 26 - 30 years, of a work force. The WWII generation starts to retire. Also, the factories at that point need retooling.

Boomers start to enter their 20s, and start entering the workforce.

Re: WTF Happened in 1971? (2019)

#57

Post by chmod600 »

ZacharyPitts wrote: post #10

Amazed that the site does not call out Nixon completely abandoning the gold standard in 1971. Financial investments thusly did not need to be backed by actual assets anymore, to the point of today where the whole of money is loans against loans against loans.

I'm curious about the mechanism. It seems important, but can you elaborate on the effects?

Re: WTF Happened in 1971? (2019)

#58

Post by not2b »

Business managed to exploit a number of crises to break the power of labor unions. The gold standard had nothing to do with it: sticking with gold would not force management to share productivity gains with labor.

Re: WTF Happened in 1971? (2019)

#59

Post by triangleman »

akhilcacharya wrote: post #29
triangleman wrote: post #9

Love the charts, then scroll to the bottom and "oh, Bitcoin". Sorry but there are other ways. Did you know that the Balanced Budget Amendment (proposal) failed by a single vote in 1995?

Can't even imagine what current economic recovery would look like if we had a Balanced Budget Amendment under President Ross Perot in '95.

Truly unimaginable.

Re: WTF Happened in 1971? (2019)

#60

Post by pjc50 »

bryanlarsen wrote: post #25

The author obviously wants you to believe that it was the abandonment of the gold standard, but there are several other theories that have more credence with mainstream economists. The early 70's was the start of a horrible period of stagflation: stagnation coupled with inflation. Some do blame the loss of the gold standard, but the leading theory is the OPEC oil crisis. Others blame market regulations, the EPA was p…

The thing is, there was a lot going on in the 1968-1971 period. Everything from civil rights to the moon landings. The collapse of Bretton Woods is important, but we have to ask why and what pressures led to that point.
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