WTF Happened in 1971? (2019) • Hacker News Board

Re: WTF Happened in 1971? (2019)

#291

Post by proverbialbunny » Mon, Nov 23, 2020, 6:55 PM UTC

aazaa wrote: post #107

Plenty 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…

It's interesting that the middle class started losing wealth and income stagnated in relation to the larger economy starting in 1971-1972, but most of the events from 1971 are lagging indicators. Eg, the CIA was actively keeping China from being able to obtain chips in the mid '70s. China was barely able to export anything until the late '80s - early '90s. The birth of the digital age is another good example, but tech didn't take over many jobs until the late '70s if not the mid '80s.

When analyzing wage stagnation in a finer detail: Going off the gold standard caused a rise in the stock market. Also, we have regulated food prices in the US, so the current metric we use to measure inflation isn't strongly correlated to a living wage. Meanwhile, people who are invested in the stock market and rental properties, aka the upper 10%, have seen a large boom in wealth. (Not just the upper 1% have had a rise in wealth.) Unless we have any other ideas that is being overlooked here, it does in fact look like going off the gold standard started this trend, and has only been amplified by trade and tech later on.

Could it be possible that unionized workers started shrinking in 1971? They're commonly cited by historians as a key element in the rise of working class wages, so it would be a good place to check to see if there is a correlation there.

Re: WTF Happened in 1971? (2019)

#292

Post by xeromal » Mon, Nov 23, 2020, 6:57 PM UTC

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

Yeah, there were a lot of key things that happened but it's hard to pin what caused everything else to blow open

Re: WTF Happened in 1971? (2019)

#293

Post by groby_b » Mon, Nov 23, 2020, 6:58 PM UTC

Clearly, we lost the ability to form coherent sentences. Or at least the author did.

A bunch of graphs do not make a valid argument. Or even a good question. I am rather disappointed that something that lacks any semblance of analysis or thought makes it to the front page of HN.

Re: WTF Happened in 1971? (2019)

#294

Post by CarelessExpert » Mon, Nov 23, 2020, 6:59 PM UTC

justinzollars wrote: post #285

CarelessExpert wrote: post #258

Earlier quoted context omitted.

> Its completely irrational to believe you can print yourself into prosperity. This is clearly a straw man. MMT provides an alternative theoretical basis that might explain the apparent disconnect between money supply and inflation: https://www.investopedia.com/modern-monetary-theory-mmt-4588... > According to MMT, the only limit the government has when it comes to spending is the availability of real resources, like…

MMT promises money for nothing and the debt for free. The idea isn't modern - its just debasement with a new name. As old as humanity.

Well, that's twice, now, that you've caricatured ideas you don't agree with, choosing to knock down straw men instead of engaging in a genuine discussion, and that means there's little point in continuing.

Have a nice day!

Re: WTF Happened in 1971? (2019)

#295

Post by markvdb » Mon, Nov 23, 2020, 7:01 PM UTC

These stats can be fascinating. The naked Hayek quote at the end confines the discussion though.

It's a warning light that anything not Austrian school will potentially be frowned upon in the discussion the website author pretends to stimulate.

Re: WTF Happened in 1971? (2019)

#296

Post by AnimalMuppet » Mon, Nov 23, 2020, 7:01 PM UTC

anovikov wrote: post #51

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.

Not in the 1970s. Maybe by the late 1980s, and even more since 1990.

Re: WTF Happened in 1971? (2019)

#297

Post by [deleted] » Mon, Nov 23, 2020, 7:02 PM UTC

tomp wrote: post #184

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…

> And energy is a massive component in the price of almost everything we consume. Is it really? What would be different if energy was much cheaper? Would we have more advanced rockets or robots or phones? Better CPUs? More and cheaper housing built in dense cities? Cheaper education or medicine? More job security? Even more food? I realize that energy is an important input into some industrial processes, but I don't…

[deleted]

Re: WTF Happened in 1971? (2019)

#298

Post by XorNot » Mon, Nov 23, 2020, 7:04 PM UTC

drocer88 wrote: post #279

UncleOxidant wrote: post #65

Earlier quoted context omitted.

> 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.

Do you have a source for this claim? Canada , Sweden, Switzerland, Argentina, Spain , Australia , New Zealand and arguably undeveloped India, South Africa, Brazil, Mexico and other parts of Latin America were "intact".

By population the US dominates the entire list of first world countries you have there, and as you note, the remainder were underdeveloped at the time.

The US benefits a lot from simply being big. On some level success is simply about biomass - you need the largest number of brains you can, sitting around thinking about stuff.

Re: WTF Happened in 1971? (2019)

#299

Post by CarelessExpert » Mon, Nov 23, 2020, 7:04 PM UTC

Ericson2314 wrote: post #196

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.

Pure inflation is actually progressive: wages and prices go up in tandem (workers are fine), but savings (right peoople's) are debased.

And debt gets cheaper. For example, inflation is great if you buy and hold a mortgage for an extended period of time.

Re: WTF Happened in 1971? (2019)

#300

Post by spurgu » Mon, Nov 23, 2020, 7:05 PM UTC

Ericson2314 wrote: post #172

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…

I don't buy this because we could have easily kept on building nuclear power plants. There was temporarily an energy shock, but the long-term issue is insufficient demand not (energy) supply.

Most of the machines that run the world don't run on electricity, but oil.

An easy to build open-source pocket sized fusion reactor would be nice.