Nixon was president and the war on drugs started.
WTF Happened in 1971? (2019)
101–110 of 477 posts
Re: WTF Happened in 1971? (2019)
#102The 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 :)?
Pretty sure that the cost of energy underpins almost everything we do or produce. I can't think of a single example that doesn't have a large energy component.
For example, health insurance is made up of the cost of paying people and creating medicines - and ultimately, it comes back to food, extracting raw materials and paying down debt, all of which are affected by the price of energy.
So dropping energy costs will eventually make most stuff cheaper (or make more money for rich people :( )
Re: WTF Happened in 1971? (2019)
#103It'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.
Yeah, A Farewell to Alms makes a pretty convincing argument that 1945 to 1971 was an anomaly. Ever since the advent of agriculture, income inequality has been on the rise. The Belle Epoch in France was the peak of that - then revolutions, World Wars, and Socialism happened. Once that civil unrest stopped, the trend continued back up.
(We might have recently passed Belle Epoch-levels of inequality - not sure this is an accomplishment we should brag about)
Re: WTF Happened in 1971? (2019)
#104The 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 graphs show two things: A relative increase of income for the wealthiest and a relative decrease for everyone else, specifically in the US.
The 70s and 80s mark a political shift to privatization of public service/infrastructure and deregulation of and trade-agreements for the investor market.
Re: WTF Happened in 1971? (2019)
#105Anyone read Piketty's Capital? I'm reading it right now and this seems to line up well with the book.
Re: WTF Happened in 1971? (2019)
#106How do economists measure "productivity", and it is a worthwhile metric? It always seemed super sketchy to me.
“ Labor productivity is a measure of economic performance that compares the amount of goods and services produced (output) with the number of hours worked to produce those goods and services.” [0]
It’s defined in many ways, but in the US I think it’s usually BLS. One thing that helped me when studying this stuff is that these are all based on some judgement and qualitative work and aren’t platonic terms. This used to frustrate me, but then I realized that these are really hard concepts to truly know so these seemingly arbitrary definitions because at least they allow some shared understanding. And also gets us past a lot of the standard “he said, she said” cycles of defining and trying to get reputable data.
Re: WTF Happened in 1971? (2019)
#107Plenty of events to choose from here:
https://en.wikipedia.org/wiki/1971
Highlights:
- "A new stock market index called the Nasdaq Composite debuts."
- "Starbucks, a major coffeehouse and outlet in worldwide, is founded in the U.S. State of Washington."
- "The U.S. ends its trade embargo of China."
- "President Richard Nixon declares the U.S. War on Drugs."
- "Southwest Airlines, a low-cost carrier, begins its first flights between Dallas, Houston, and San Antonio."
- "American President Richard Nixon announces his 1972 visit to China."
- "President Richard Nixon announces that the United States will no longer convert dollars to gold at a fixed value, effectively ending the Bretton Woods system. He also imposes a 90-day freeze on wages, prices and rents."
- "The United Nations General Assembly admits the People's Republic of China and expels the Republic of China (or Taiwan)."
- "Ray Tomlinson sends the first ARPANET e-mail between host computers.["
- "The People's Republic of China takes the Republic of China's seat on the United Nations Security Council (see China and the United Nations)."
- "The U.S. dollar is devalued for the second time in history."
These events can be grouped into categories:
- pro-deflationary (e.g., China rising, the first email message, Southwest)
- anti-working-class (War on Drugs)
- increasing financial speculation (NASDAQ)
- financial (end of Bretton Woods, US dollar devaluation)
- consumerism (Starbucks makes coffee cool and diverts billions from working-class savings)
I know that the site advocates the end of Bretton Woods as the main cause, but that event is just one in a spectrum of major arcs that had major emergences in the early 1970s after slow burns in the 50s and 60s.
Re: WTF Happened in 1971? (2019)
#108Earlier quoted context omitted.
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 :)?
For something searchable, see “Baumol’s cost disease.”
I don’t understand how baumol’s cost thing is any different than lower supply of labor causing price of labor to rise, and why it would merit a special name or Wikipedia entry.
Re: WTF Happened in 1971? (2019)
#109This is clearly because 1970 is the Unix epoch when this version of the simulation began. It took about a year for things to get sufficiently out of whack so that stuff started to diverge in a noticeable way. I hope our implementors are proud of me for making reference to the simulation that we're all in.
Re: WTF Happened in 1971? (2019)
#110Amazed 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.
Random thought: since the US dollar hasn't been backed by a physical asset in decades, does it really make sense to prosecute a person(s) for "stealing money." Stealing implies you have taken something of value and requisitioned it for ones self, but since money has no actual value was it really stolen? Especially in the digital age, the numbers you see in your bank account are just 0s and 1s sitting dormant in some…
As long as you can still buy things of real value using money, the money itself has value.