From the comments, was 1970 an American turning point of sorts?

A lot of things changed around 1970. That year looks like a major historical fulcrum for the USA.

1970 was approximately (within a few years):

1. The year manufacturing employment started to stagnate (later to decline).
2. The Great Compression reached its peak.
3. The Great Stagnation began.
4. Roe v. Wade was passed
5. Women entering workforce en masse.
6. Historic increase in immigration begins.
7. End of Bretton Woods.
8. Beginning of large trade deficits.

That is from Famulus.


I'd add to the list, "Modern exclusionary zoning"

Hmmm! What could have caused all these problems...

"6. Historic increase in immigration begins."

And yet, immigrants as a share of the population was higher in the past.

Not from the third world, and moving to a welfare state.

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Maybe its because every major city got burned to the ground by blacks in the latter half the the 60s and zoning was a way to protect the suburbs/good parts of the city from the same fate.

Please cite one city that was "burned to the ground". Words have meanings and all that.

certainly a turning point. Earlier more singular year-points would be 1861, 1873, 1893, 1913, 1933.

Each line item is a bad thing.

Although 1968 was more famous at the time, in retrospect, 1969 was the truest beginning of the New Order:

- Environmentalism took off with Santa Barbara oil spill followed by first Earth Day

- Feminism got going again

- Gay Lib at Stonewall

- Affirmative action launched by Nixon Administration

Of course. I always used 1973 as the year, but same sentiment. Add in Watergate, end of Vietnam, oil shocks (Great Stagnation).

Jefferson Cowie's "Stayin' Alive" is great on this.

1970 is clearly too soon. A lot of these things happened in 1973, signaled by the OPEC oil price shock, but almost none happened sooner, and several happened later, with the manufacturing employment peak not until 1978. 1973-1975 looks more like it, with 73 the leading candidate, if one insists on a particular year.

Agreed. I always thought the 1973 Arab Oil Embargo was a turning point, but there were definitely other causes or signs of decline.

In 1988 America signed on to the Basel Accord’s risk weighted capital requirements for banks.

These gave banks huge incentives to finance what was perceived as safe, and to stay away from the “risky”, which is so contrary to a Home of the Brave opening opportunities for all.

These also decreed risk weights of: 0% sovereign, 100% citizens, which implies bureaucrats know better what to do with credit than entrepreneurs, which has nothing to do with the Land of the Free and much more with a Vladimir Putin’s crony statist Russia

And sadly no one asked: Why should we think that what bankers perceive as risky is more dangerous to our bank system than what bankers perceive as safe?

The 1977 Community Reinvestment Act, and other pandering, so-called civil rights and consumer protection laws were more problematic than flawed, complicated risk-based capital rules.

"Around 1970"? Is 1980 around 1970? Is 1984? Me thinks someone might be fudging the calendar for political reasons. Anyway, nothing compares to the 1980s for the decline of American industry, as a combination of a policy of a "strong" dollar coincided with a policy of federal government deficits. The deindustrialization of America had its genesis during the Reagan administration; conversely, the China miracle had its genesis during the Reagan administration. One can object, but it's history. The population of Shenzhen in 1980 was about 30,000, the population today is over 12 million.

Up until about 1980, wealth inequality in America was declining (since about 1929), but has been rising since (with a short decline and recovery following the financial crisis). Indeed, the share of wealth held by the riches 1% reached its bottom around 1980 and peak today (today reaching the level in 1929). Give that some thought.

Yeah, stagflation will do that to you. How come reducing inequality always means making everyone poorer?

Well, not quite everyone. Castro and Chavez got rich.

Reply to rayward. Definitely the 80’s. Perhaps of interest, the 60’s contrast. In 1965, America had news anchor Walter Cronkite, identified in public opinion polls as the man Americans most trusted. Trust in government peaked in 1964 at 77%. Stock buybacks were virtually illegal in 1965, and the top 1400 incomes faced a 90% federal income tax rate.

In 1971, Nixon, a big government-loving Republican, closed the gold window, which ended dollar convertibility @$35/ounce. He also imposed a wage/price freeze and import restrictions. They effectively devalued the dollar to $42.22/ounce gold, which raised commodities prices, i.e., oil soared 4-times = gas lines. By 1974, inflation was 12% and gold (Us citizens could not own monetary gold) was $195/ounce. The genius Fed raised rates to unprecedented levels (13% mid-1974) to fight inflation (from 1971 dollar devaluation and the oil embargo/shock after the Yom Kippur War October 1973). That sent GDP crashing down 3.2% (biggest post-Depression drop until the 5.1% drop 2007 - 2009). Unemployment rose to 9% - highest since the Great Depression. S&P 500 went down 51.5% from January 1973 to December 1974.

After the central planning "victories" beginning in 1971, credit soared to the benefit of the banks, CEOs, the already wealthy, and the politically connected. Inflation and fiat currency are major sources of global trading imbalances, soaring debt, escalating median home prices, declining real wages, and the massive rise of the 1% at the expense of the bottom 90%.

Central planning sucks. Give more powers to the fed!

Central planning my backside. That is all capitalism under the guise of the now "merchant" turned aristocrats. Which nobody gets.

Free Markets are for my father used to say.

9. The moon landing

Correlation is causation.

Do flat-earthers believe the moon landing happened?

And is the moon flat too?

And is it made of cheese? ... This is a very important question for some demographics.

Swiss cheese, so you can get through the holes and enter an entirely different universe.

First Earth Day on Lenin’s 100th Birthday.

Add that to the mix to understand the religiosity of the environmental movement within the broader context .

Whoa. I just realized all those people drinking margaritas on Cinco de Mayo are toasting Karl Marx.

I have felt for a long time that the social and economic consequences of the birth control pill have been drastically underestimated.

And of course the Nixon Shock.

I'd say 1973, really. Oil shock and end of Bretton Woods, on top of all the stuff you mentioned.

Roe vs Wade did not "pass". It was a Court decision. And the year was 1973.

He said "within a few years" of 1970.

And complaining about "pass" a new law vs "issue" a new law is just hairsplitting.

You could make a case for 1968 as the year it all hit the fan, but basically the entire Vietnam era, say '66 to '73. The Great Society, Watergate, the youth-driven culture ...

But why did that happen? If the system was basically great - why did nobody think so? Why did a different man win each presidential election 1956-1980 if everyone was basically fine with what was going on, and why the riots and the assassinations.

Except Nixon - who is apparently the counterfactual showing how happy people were with their own leaders in the peak golden age.

Obvious answer would be demographics.

Young people are generally, well, idiots. Baby boomers were a demographic bulge of youthful lunacy which threw the nation into chaos, and will have caused its bankruptcy and decline single handedly.

August 15, 1971: Nixon takes the US$ off the gold standard

In 1970 the US became a net oil importer.


The evolution of the environmental activist towards junk science and anti-science and the rejection of real science as was shown by the EPA head overriding the scientific analysis on DDT for his political analysis.

Poe's Law was also discovered.

"Around 1970" is when the effects show up, but causes precede. Look further back. For example, Bretton Woods ending isn't a cause, it is an effect of something else.

#5 requires clarification. Women were always in the workforce but mostly constrained to a few occupation. Additionally, they made up a significant amount of the workforce during WWII when huge numbers of men were serving in the military. When victory over Japan was declared a lot of these women lost their jobs the next day.

When women go on maternity leave today, they are guaranteed to get their old jobs back when they return. In WWII a lot of men had to go on "military" leave, so obviously that same sort of guarantee was implicitly extended to them.

Probably not a good idea having all those men with military training hanging around doing nothing anyways.

don't forget regulation. There is MASSIVE boom in federal regulation that happens right around 1970.

Indeed. The current structures of bureaucracies involved in every aspect of commercial activity was built in the 70's.

and powered by corporate capture. Regulation, please.

Of course there were always noir B movies, and "In Cold Blood" was 1966, I see, but 1970 saw the trial of Charles Manson, whose victims would not see anything that can be called justice, who would remain a twisted sort of pop culture icon, a celebrity - perhaps the beginning of a sickness in American life? - the ... deification is not the right word, not sure what is - the obsession with serial killers, with true crime generally, and murder as entertainment, that had me, another product of 1970, my first decade of life sifting through any available nightstands and bookshelves, for sordid books, filling my head with tawdriness that no month of Sunday schools could erase (I recall a sleepover, turning the last page of the birthday girl's parents' copy of "Blood and Money" as dawn appeared, a dozen nine-year-old girls asleep around me). There was a piquant hometown connection with that one, but - rich people, adult doings, it only troubled my sleep a little. Not like that other local horror, the Candy Man ... I was very old before I read about that - it was never, ever spoken of.

I feel a world of wonderful progress since 1970.

YMM obviously V.

I see we're being a bit generous with "within a few" years. Many of these are too vague to understand what is meant (#2) or never actually happened (#5 -- seriously, I can't even figure out what he's talking about, women as a share of the labor force just goes up steadily from the start of the data in 1948 into the 1980s).

On the early side, the increase in immigration (#6) dates to the Immigration and Nationality Act of 1965. On the late side, the earliest defensible date for "large" trade deficits is 1977 (US runs a surplus in 1975 and there's no way to describe the 1976 deficit as large).

So, that's a 12 year window. Did it include some important events? Yes, definitely. Find me a 12 year window that didn't.

The Nationality act of 1965 is frankly overrated. It actually lowered immigration slightly. The real cause is the BW's collapse and the US forcing in "pro-market" dictators in the 50's and 60's destabilizing regimes setting the stage for capital flows to guide them into America.

"The Nationality act of 1965 is frankly overrated. "

Nope. It was a major factor in the decline.

LBJ's "Great Society" movement and subsequent government programs were particularly devastating to black s. Welfare destroyed the black family. The decline of the Black Baptist Church was also a big problem.

That said, I don't think one thing can be identified as the cause of the decline - it was a confluence of forces.

Good point. Thinking about, the decade plus from the mid 60s to the mid 70s may actually have been less of a turning point than most. I'm not sure what the least eventful decade was but 1945-1955 and 1955-1965 seem more important. Arguably 1975-1985 is less eventful. 85-95 is eventful geopolitically but less so economically. 95-05 is eventful in not ways. Probably too soon to say but 05-15 seems less pivotal.

So 65-75 is maybe about average or a little below average I'd say.

One change most people don't realize took place in the mid-'60s is Lyndon Johnson opening up the U.S. market to buy Japanese support for Vietnam. This took place just a year after Toyota debuted the revolutionary Corolla, so they had the product to take advantage of this opportunity. Through in the oil crisis and you have a perfect storm. Of course, it took about a decade for all this to be felt. It was the 1981 recession from which Detroit never recovered.

Could have been worse. Some of these were good:

1. The year manufacturing employment started to stagnate (later to decline). Bad
2. The Great Compression reached its peak. Bad (slope change)
3. The Great Stagnation began. Bad
4. Roe v. Wade was passed Good
5. Women entering workforce en masse. Good
6. Historic increase in immigration begins. Good (for expertise immigration)/Bad (for working class/unskilled immigration)
7. End of Bretton Woods. Good
8. Beginning of large trade deficits. Bad

There you have it. The final word and unassailable assessment.

Not to rip most of the bourgeois leg humpers on this board..........but
Manufacturing peaked in 1959. Not 1970. You could even argue 1925 in terms of speed of growth, but the rise of the arms industry related to industrial production created a bulge in industrial production. Automation killed a lot of jobs by 1929 and factories were closing between 1926-29 as a result, in a wave not seen during the upside of the business debt cycle. The growth boom from the industrial revolution was over. Austrians always always always forget this. Even Mises didn't admit it too before he died. IE era was easy debt to growth. Capitalism is the debt based system and always will be. With commodity money, it got exposed big time in 1929.

By the 40's the market knew it needed a new paradym and began moving by 1973, powered by the incoming boomer demographic, to a consumption based society, which also had the effect of making more people wealthier in terms of "stuff". Thus the need to keep growth growing, social mores broke down and women which has seen a rising share of "work" since 1890, exploded. This boosted productivity as much as computers. But it kept the system going to 2008.

I think we have to understand on immigration, the US was getting huge migration flows from 1870-1930........with a decreasing share from Northern Europe. The Great Depression was a huge shock that knocked down immigration flows for 40 years before capital flows caught back up. The move to the service sector created a boom of low wage positions with the wealthy that needed filled. US dollar imperialism destabilized other regions forcing in "immigrants" following the capital flows. Once again, people do not understand this. White's are pampered by the Jewish bankers via debt expansion. In a "final collapse" those cushy middle to upper middle class jobs will be gone. Thus so will the role as "house slave" for the poor jaded and degenerated tribesman who wondered through northern eurasia for 1000's of years before the mass migration of 2000 years ago. The black death's impact and the Jews filling the gap, changed the course of history.

Nope. Manufacturing employment peaked in June 1979 (NSA) or May 1979 (SA).

Source: BLS, Establishment Survey, national survey, NAICS 31-33.

You got peak growth wrong too. Peak was 27% in July 1941.

Data only goes back to January 1940 so I have no idea how you got 1925.

"...Great Depression ... knocked down immigration flows for 40 years ..."

Nope. The Immigration Act of 1924 deliberately reduced immigration.

From the Wikipedia article:

'According to the U.S. Department of State Office of the Historian, the purpose of the act was "to preserve the ideal of U.S. homogeneity."[2] Congressional opposition was minimal.'

More from Wikipedia:

"Proponents of the act sought to establish a distinct American identity by preserving its ethnic homogeneity."

Quit making sh*t up mouse!

More like 1957, that is when the growth rate stopped booming. It was a gradual decline to 1981.

Booms don't last forever and US monopoly on cars was over.

Sorry, but growth rates were higher in the 60s than the 50s. Closer to your date is 1956, when, according to Richard Easterlin, the US reached its all time max of happiness levels. My explanation of that is that we know that "intimate relations" make people happy, and 1957 was the year of max births during the bably boom. Also, up until the end of 56, we were still in the "First Thaw" of the Cold War, and the economy was doing reasonably well, if not growing as fast as it would a few years later. But for peace and prosperity it looked good compared to the previous quarter of a century or so, and there was a lot of "intimate relations."

Of course, Americans can't agree on anything, even the time when the sun rises. Or from which direction. Alas, economists can't either. For economists, disagreement is a good thing. That way they can't be blamed for failing to come up with a solution. Avoiding responsibility is what people do. Sun spots. That's what caused America's decline. Sun spots. Who ya gonna blame for sun spots? God?

I recall an incident, many years ago, when I sat in on a conference with a senior lawyer and client. The client described his situation and asked for advice. The senior lawyer responded that it was a complex matter that required research and careful consideration before advising the client. After the client left, I mentioned to the senior lawyer that we had dealt with the same situation with a different client, and that we already knew the advice to give to the client. Dumb me. I just didn't understand complexity.

So your answer is that lawyers caused the decline? Fair enough.

Container ships reached a critical volume allowing for the world to allow more efficient delegation of comparative advantage.

For manufacturing the Programmable Logic Controller (PLC) was coming online to automate manufacturing lines. It took weeks off model year change overs at auto plants. PLCs are still running almost every production line in the world.

As for the rest, it does seem in hindsight that what Mises called the Zwangswirtschaft (compulsory economy) form of socialism peaked and began decline in the US. What's good for GM is good for the country collapsed in this period. Took Reagan and the deregulators to put paid to those fighting to protect their old economy rice bowls.

Roe v. Wade was issued in 1973.

Court opinions are not "passed."

Emanations of penumbras; with that example of solid reasoning, I suppose we might add the decline of the legitimacy of the courts to the list.

9. The US begins pulling troops out of Vietnam.

It seems to me the Vietnam War must have had an effect on suppressing unemployment in the late '60s. Many working age young men were either drafted (many of whom were not sent to combat) or in college avoiding the draft. It might not have been a huge impact, but I would think there would be some.

It was also the year around which the F-word made its debut in movies
MASH I think

1, 5 and 6 aren't fulcrums, 3 is hypothetical, and 4 and 6 only mattered in some places. I could say the same about 1969, pretty much, and you sent your big, manly rocket to the moon under big, manly Nixon then, so I don't think a lack of right-wing masculinity is the problem! The Chinese stopped killing each other and started to want to be rich; the rest is detail.

MR readers had to start saying "states' rights" instead of saying "Negros".

And yet Neoliberalism has been the overwhelmingly dominant economic program since 1980 across the entire world. Why hasn't it fixed everything???

Empty-um comments and yet nobody has mentioned that The Beatles broke up in 1970 and that therefore pop music became boring rubbish.

The seed was planted in 1964.

Ttraditional norms were/are followed less.

Divorce rates jumped around this time:

The sexual revolution also took off around this time

Don't forget:

The War on Poverty Won but in Vietnam Lost.

Boomers started voting

1973-present, The era of oil price volatility:

1970 marks 25 years after the end of WWII. All the spending on WWII created a lot of flywheel that took 25 years to wind down.

Some of those events are synthetic and the others are not precisely dated to 1970.

What happened in the 1970s?

Maybe we should consider the Post-WW2 boom years (1948 - 1973) as the true historical outlier not the post 1970s. The post WW2 had a broad based growth across all income sectors and that is the true outlier not Gilded Age or the post-1974 economy. The reality of capitalism is both uneven growth, declining local community and the decrease in family size. (Look at US birth rates in 1900 - 1932 and there was a Baby Bust in the early Great Depression also. In 1932 2.2 babies/female was below replacement levels.)

Maybe WW2 created a labor supply shortage and the need for family formation change priorities. And by 1974 this labor shortage stopped. (Actually the movement against unions was strong in the late 1940s but union power was never stronger than late 1950s. Also look up the job created during the Eisenhower administration which was modestly higher than Obama years which included the huge layoffs in 2009 and 2010.)

Roe V. Wade was not "passed." It was decided y the Supreme Court. And not in 1970, but 1973.

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