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WTF Happened in 1971? (2019)

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Re: WTF Happened in 1971? (2019)

#321

Post by raiflip »

TwoBit wrote: post #273
raiflip wrote: post #127

Earlier quoted context omitted.

A fairly simple explanation that for some reason I don't see a lot of is the drop in union membership density around this time period. Such a drop would decrease bargaining power and therefore decrease the rate of wage increase

Is there a chart for that?

Graph created by the Washington Post: https://www.washingtonpost.com/resizer/7IbsRIhRFbTYRuEjla6ki...

You can see union membership was on the decline since the 1950s, but it accelerated around the 70s. It is hard to see the timeline in that graph, in this one it is harder to see the acceleration, but it is easier to see the timeline: https://rpubs.com/jncohen/uniondensity

Re: WTF Happened in 1971? (2019)

#322

Post by Nition »

ohyes wrote: post #109

This 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.

This explains why US GDP at the end of 1969 was right on 1 trillion. It's a default starting value.

Re: WTF Happened in 1971? (2019)

#324

Post by trixie_ »

xyst wrote: post #86
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.

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…

The fact that 'stealing money' is harshly prosecuted is just one factor that contributes to its value as a currency.

Re: WTF Happened in 1971? (2019)

#325

Post by hosh »

jandrese wrote: post #236
hosh wrote: post #198

Earlier quoted context omitted.

I'd add that in 1970, the intermodal shipping container became an ISO standard. Containerization has been developing since 1956, and along with minicomputers, would have an impact on world trade and manufacturing for decades to come.

IMHO this could be larger than most people would think. This made it affordable to export labor overseas, starting the power imbalance between employers and employees. I'll bet if you look this is the start of die off of Unions. Now there is an alternative to employees who start demanding living wages and benefits, you can build your factory in another country where labor has few rights. The only unions you would exp…

Yup. Labor is not as mobile for the employee.

Amazon is interesting too. They brought the global supply chain to the consumer. What consequences will that have?

Re: WTF Happened in 1971? (2019)

#326

Post by trixie_ »

dnautics wrote: post #194

People are asking why decoupling from the gold standard would cause a loss in earning power for labour: https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi... "when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained bas…

Another great use of inflation is to reduce the value of the national debt. It's like a flat tax that affects everyone equally.

Re: WTF Happened in 1971? (2019)

#327

Post by faet »

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…

Their was also the greater shift to non-wage benefits. If you look at total compensation vs productivity the chart tracks much closer.

https://imgur.com/Juc8FMn

Re: WTF Happened in 1971? (2019)

#328

Post by throwaway-8c93 »

raiflip wrote: post #127
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…

A fairly simple explanation that for some reason I don't see a lot of is the drop in union membership density around this time period. Such a drop would decrease bargaining power and therefore decrease the rate of wage increase

After having witnessed dramatic declines in union membership in new European Union members, and continuing downward trend in Scandinavian countries, I feel like the drop in membership is the consequence of unions becoming powerless, not a cause. If even the large unions cannot mount any effective pressure for increasing compensation, shrug at layoffs, and are fatalistic about outsourcing, what's the point of being a member?

Anecdote from Finland: in a personal conversation, one long-term union representative bemoaned that, until mid 2000s, companies considered unions as partners, consulted difficult staffing decisions with them, or at the very least felt obliged to justify the reasoning behind companies' decisions. After the crisis, the mood all changed - spending cuts, layoffs or any changes to salaries or benefits are now presented as a done deal from higher up, any union negotiations are treated as a mere formality.

Re: WTF Happened in 1971? (2019)

#329

Post by SilasX »

avianlyric wrote: post #82
bwb wrote: post #67

Earlier 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 :)?

> And energy is a massive component in the price of almost everything we consume. This includes healthcare, day care, college costs. Even if only indirectly.

I really don't think colleges were using 10X as much energy to operate since the 70s.

Re: WTF Happened in 1971? (2019)

#330

Post by trixie_ »

justinzollars wrote: post #171

I'm a proponent of the Gold Standard because inflation is a hidden tax. Worse, it is a regressive tax on the poor. There is a cost to having 6 fleets of aircraft carriers, 20 years of endless war and a huge unfunded pension liability. If we decided to pay for our promises in an honest way - it would equal 10% of our GDP for 75 years. Gold is honest money. Fiat currency is not.

Here's your requirements - lots of government services and low (upfront) taxes.

Here's the solution - use inflation as a hidden tax to cover the spending without an upfront tax.

Do you have another solution that meets the requirements without changing the requirements?

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