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WTF Happened in 1971? (2019)

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Re: WTF Happened in 1971? (2019)

#61

Post by quickthrowman »

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.

You can blame Milton Friedman’s Shareholder Theory of Value, proposed in ... 1970

Proof: look at stock returns when management pays more wages vs cuts wages/jobs

Re: WTF Happened in 1971? (2019)

#62

Post by milkrocks »

wffurr wrote: post #38

It's more like WTF happened between 1945 and 1971. I think that was an ahistorical period of low income inequality, and now we're back to "normal" such as it is.

it's more like what didn't happen. Between '45-71 Europe and Asia were still rebuilding from WWII, by the seventies they were finally able to compete again.

Re: WTF Happened in 1971? (2019)

#63

Post by [deleted] »

novia wrote: post #40
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.

Not only that, but the war on drugs was started in 1971 as well.

[deleted]

Re: WTF Happened in 1971? (2019)

#64

Post by tw04 »

What happened? Outsourcing happened. The 1970s is when the US went full-bore on the "global economy" and started outsourcing all sort of manufacturing jobs to the east. The gold standard and oil crisis are just easy excuses to distract from the fact we've been outsourcing our middle class for 50 years then acting surprised wages have stagnated. It was an easy way to break unions and drop wages. The story of "those jobs were replaced with tech jobs" is nice to claim, but the numbers don't really add up.

https://www.cnbc.com/id/47323840

Re: WTF Happened in 1971? (2019)

#65

Post by UncleOxidant »

wffurr wrote: post #38

It's more like WTF happened between 1945 and 1971. I think that was an ahistorical period of low income inequality, and now we're back to "normal" such as it is.

> I think that was an ahistorical period of low income equality

You mean low income inequality, right?

That post WWII era in which the US was pretty much the only developed nation with it's manufacturing capability still intact. That and the GI Bill explain how that era was exceptional - a large number of folks who returned from WWII got free college educations.

Re: WTF Happened in 1971? (2019)

#66

Post by triangleman »

djur wrote: post #31
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?

Yes, we narrowly averted disaster. Did you know that amendment required a supermajority to raise taxes?

Not true:

https://www.congress.gov/bill/104th-congress/house-joint-res...

Re: WTF Happened in 1971? (2019)

#67

Post by bwb »

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…

hmmm... dropping energy isn't going to help with the big costs families face in terms of health insurance and costs, day care, college costs, or housing.

Am i wrong :)?

Re: WTF Happened in 1971? (2019)

#68

Post by nwellnhof »

0898 wrote: post #15

How do economists measure "productivity", and it is a worthwhile metric? It always seemed super sketchy to me.

Basically, all economic data is sketchy. One of the main reasons is that you must adjust historical data for inflation but it's simply impossible to measure inflation objectively.

Re: WTF Happened in 1971? (2019)

#69

Post by anovikov »

Not sure what the "income growth" chart actually means, but if both bottom 90% and top 1% income, although by very different tracks, grew by about 3x in 1917-2012, then something is wrong. Because real GDP per capita grew 7.43x [1]. Logically the percentiles between 1% and 10% from top don't matter all that much, and in any case they must be in between top 1% and bottom 90% -> arrive to about same result although by some middle sort of track.

Any explanation? That chart seems to be a gross misinterpretation of something. Proportion of income in GDP could have only increased since, maybe income of the rich, but still. Where did the 2.5x difference in growth rates come from?

[1] https://www.measuringworth.com/datasets/usgdp

Re: WTF Happened in 1971? (2019)

#70

Post by blablabla123 »

dexterdog wrote: post #23

I don't mean this to say that the women's liberation movement was a bad thing because it was not, but that started in the early 70s and had the effect of rapidly inflating the supply of educated potential white collar employees.

Historically, before this liberation event (and it's not the only one) women's ratio in the work force variated greatly especially during war times when a lot of women were encouraged to work outside of the households. I remember the term "reservist work force" from history class.
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