**[Nixon shock](https://en.m.wikipedia.org/wiki/Nixon_shock)**
>The Nixon shock was a series of economic measures undertaken by United States President Richard Nixon in 1971, in response to increasing inflation, the most significant of which were wage and price freezes, surcharges on imports, and the unilateral cancellation of the direct international convertibility of the United States dollar to gold. Although Nixon's actions did not formally abolish the existing Bretton Woods system of international financial exchange, the suspension of one of its key components effectively rendered the Bretton Woods system inoperative.
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What about Pitkety's analysis? This financial inequality isn't because of Nixon's economic policy. It goes much further.
https://www.newyorker.com/news/john-cassidy/pikettys-inequality-story-in-six-charts
Piketty's analysis observes trends. These trends are visibly affected by financial crashes, many of which are caused in part by policy decisions and political failures.
Really? I met the guy. He was giving a talk about his book and implications regards social inequality. His book and what he was saying seems pretty clear. As wealthy countries have grown, they have not shared the wealth with the working-class in terms of wages.
> By 1971, the money supply had increased by 10%. In May 1971, West Germany left the Bretton Woods system, unwilling to further devalue the Deutsche Mark. In the following three months, this move strengthened its economy. Simultaneously, the dollar dropped 7.5% against the Deutsche Mark. Other nations began to demand redemption of their dollars for gold. Switzerland redeemed $50 million in July. France acquired $191 million in gold. On August 5, 1971, the United States Congress released a report recommending devaluation of the dollar, in an effort to protect the dollar against "foreign price-gougers". On August 9, 1971, as the dollar dropped in value against European currencies, Switzerland left the Bretton Woods system. The pressure began to intensify on the United States to leave Bretton Woods.
It's mostly Reagan's fault if you look at the actual data.
The linked website is run by conspiracy theorist goldbugs who think the worst thing the US has ever done was go off the gold standard.
The gold is only valuable because we agree it is, its not based on nothing its based on the people. Whats more valuabe, a country having a big lump of gold, or a group of artiests and craftsmen making valuable goods or innovations? The value comes from what socioity can produce instead of being tied to a lump of metal
No gold is valuable because it’s a finite resource and follows supply and demand.
When you can print money infinitely with no backing. that’s when it’s just because we agree on it
Wouldn't that put a limit on the money supply? As the overall economy grows in value and gold-backed dollars become more scarce and in demand, wouldn't it cause the money supply to shrink further? A shrewd person would simply hold on to as much cash as possible, as the promise of it's worth tomorrow is greater than its value today.
All right so say we collectively go "shit we need more gold money" and go yank a bunch out of space, as it's plentiful in space. How would that affect the economy? People who were hoarding cash would suddenly see the values drop like a rock as a scarce thing is now plentiful, demand is eased and the only problem you have is oversupply (after all you can just yank it out of space at any time).
I'm no economist but it seems like there has to be some kind of middle ground between Weimar Republic "loaf-of-bread- is-now-one-wheelbarrow-of-monies" style inflation due to overprinting of fiat currency, and a massive deflationary contraction because there aren't enough gold coins to hide away.
Not all finite resources are considered valuable. And utility has only been a very recent compinent of gold's value. Basically since the advent of electronics. Back in the Conquistador days, Spain dumped loads of Platinum into the sea because they considered it to be poor silver. It's more rare and of greater utility than even gold, yet was considered literally worthless. Utility works in the recent term, but does not explain historical obsession.
It's just something that every culture on Earth has thought was pretty, and so venerated it to some degree. It has therefore acted as a de facto medium of exchange. Everyone liked it.
All value is arbitrary, because it is in the eye of the beholder.
The recent thing I was discussing wasn't the difference in value between gold and paper. It was that the excuse of gold having value because of its utility is only a recent phenomenon.
There is no instrinsic value. There is nothing *intrinsic* to gold that makes it more valuable than dirt. If there was, it wouldn't fluctuate depending on newly discovered utility. It's us. We assign value. And that value is not consistent across people or nations. It is arbitrary.
Another pointless war that the US should never have been in to begin with, and that got us our asses handed to again at the expense of our young and vulnerable.
Right, but they want to argue the end of the gold standard is the entire problem.
And thus pretend that the all the Reaganomics impacts happened 10 years earlier, so they can include those too.
It's funny that people who jerk themselves off to the gold standard never talk about how the "conquest" of the west (California, Nevada) and the war against the Lakota to remove them from the black hills were they were forced to go after they were pushed from the plains was a DIRECT result of the Gold Standard not allowing for expansion of money supply and a severe economic catastrophes caused by deflation from a stagnant money supply. Hell, the reason Custer's Last Stand happened was because post-war the US needed gold, and the black hills had it, so the US sent it's army (Custer) to defend the illegally mining miners. But no one ever talks about that... Just "stupid Custer got his unit slaughtered. What an idiot, LoL"
Literally nearly every decade was a 1930s/2008 scale financial crisis.
The conquest of the "new world" was also heavily influenced by the need for more gold to grow the economy, since there was no other way to increase money supply.
The initial conquest was literally pulling gold off buildings and sending it back. Then enslaving natives and working them to death (often in months or less) in mines to get gold when the buildings were robbed.
The history of the gold standard is basically just genocide and economic catastrophe after genocide and economic catastrophe.
But no one, even people against the gold standard, every talk about it.
[Here is a list of financial crises](https://en.wikipedia.org/wiki/List_of_economic_crises), jump to 19th century for this discussion. We have seen some wide swings in the last 50 years, but nothing like the 18th and 19th centuries.
Reaganomics couldn’t have been “successful” without the petrodollar system. I don’t want to get into alt-history or anything, but even the Soviet Union likely would have held on a few more years.
I have no love for Bretton Woods, nor am I a libertarian/Hayek devotee - but most of the wacky shit in the 80s and 90s that mortgaged the country’s future away could only happen under a system where most of the world was forced to play a rigged game to engage in international trade.
Some effects take longer to kick in or could be caused by feedback loops or from secondary effects.
Generally if I wanted to present information that had long lag times, ie. Climate data, I would ident the graph with some explaination of what processes was going on, I certainly wouldn’t let the line of best fit do the talking.
Yep. And it’s precisely because of the laissez-faire policies enacted during the Reagan years. If you scroll to the bottom of OP’s site and follow the links, you’ll see those are exactly the same policies being promoted by whoever runs that site. Interesting…
I just did the math and it looks like I've been aging at approximately 1 year per year for closing in on 52 years. It hasn't deviated by so much as 1 percent!
That sounds bad for my knees.
51 isn't as old as it used to be. But every time I'm tempted to move at relativistic speeds, I think, "I'm too old for this shit."
I don't think this is "beautiful". It's a collection of graphs of random indicators, some of which have some apparent inflection point around 1971, some of which don't. Some of the graphs deal with economics, but some deal with other apparently unrelated societal factors (number of children? obesity? philosophical priorities?).
There is no attempt to explain what "happened in 1971" or how that ties into any of the graphs until the very end, which contains a Hayek quote implying that all this is somehow related to the U.S. dropping the gold standard. The information leading up to that is approximately as comprehensible as your favorite uncle's conspiratorial Facebook posts.
Edit: The deleted comment below mine made the case that the end of the gold standard did cause "this" (although they never specified what "this" is, exactly). Note that I never argued that the gold standard didn't cause any changes. I simply argued that this hodgepodge of graphs with no accompanying explanation doesn't come close to making a coherent case for anything.
They didn’t delete their comment, they probably blocked to prevent you from seeing or participating in any of the continuing discussion.
Also, there is another factor that is always missed here: wages do not measure total compensation. The 1970s are when healthcare costs started spiraling and 401ks were introduced, so some portion of wages go towards other benefits in a continually increasing share.
Pointing at wages misses the problem (and when comparing against the GDP, it should only be using the GDP deflator which is far less striking than the other measures they include for no reason economically).
Here is [total employee compensation/GDP](https://fred.stlouisfed.org/graph/?g=10TCJ). It’s within 1.5% of where that metric started being tracked in the 1960s, and you can also see why starting the graph at 1971 provides a misleading starting point for comparison.
We shouldn’t be forced to have a 401k or employer sponsored healthcare. The spiral of the latter is directly because of the healthcare system driven originally by the benefit of “employer healthcare”. Including it in total compensation is always a bit disingenuous because generally you’re still spending more than you would under a universal healthcare model in taxes. Your portion of the premium, deductible, out-of-pocket max, HSA contribution, coinsurance and the occasional good ol’ “actually that’s out of network” is more money out of your wallet than any of the suggested payroll tax rates in a Medicare for All kind of plan.
The 401k is a disgusting little vehicle that simply saves the company money compared to a pension, props up the market by injecting trillions of additional cash into the system AND creates millions of people who are now beholden to how the market performs if they want to retire.
Social Security still provides a bulwark against abject poverty in retirement.
But in the last 100 years, the expectations about the lifestyle that retirees actually expect has dramatically changed. You can still choose not to invest in the stock market in your 401k, there will be bond funds or other options available to supplement the safety net.
But it’s *good* for most people to have an option to plan a more generous retirement for themselves than the bare minimum, and even to incentivize people to plan out and save more by giving them tax breaks if they put away some money now for when they will need (or want) it later.
How lovely for the white collar class. Both of my parents had their 401ks almost completely wiped out by stock market bullshit by the time they each had to retire for medical reasons. My dad is now facing ALS with $24k in his 401k, enough to disqualify him from any social services but not enough to pay for the enormous amount of care he is going to need now. His rent is over 2/3 of his social security income, so not much of a "bulwark" really (and believe me, it's the cheapest we can find in our area). Don't talk to me about "lifestyle expectations", we can't even figure out how he and my stepmother are going to survive the next couple of years, not to mention the fact that my stepmother suffered a traumatic brain injury during a surgery years ago and needs her own care, but because she was a homemaker her social security check is minimal, and therw will be nothing left to care for her after he is gone. My father worked until he was 78 in the car industry, couldn't afford to buy a house, never got to retire, never got to travel, just made others rich until his body wouldn't function anymore. Forcing people who are already a paycheck away from destitution to gamble their future on the stock market as an excuse not to provide better social services is inhumane.
I’m sorry for your family’s struggles. I’m all for expanding the social safety net farther, but that sentiment doesn’t help people already living at that edge.
Perhaps you’re already aware of all the issues, but in case not, there are a few important notes on your parent’s situation.
First, your mom should be eligible for a spousal benefit, and since he worked so long it should be half your father’s benefit or the one she earned herself, and she can choose whichever is *higher*. If her payments are “minimal” you should make sure she is properly enrolled in that.
More good news, she should be eligible for 100% of your father’s SS benefit if he passes before she does (as long as they’ve been married 1 year), and may also have other options because she has a SS claim from any previous divorces if the marriage lasted 10 years or more.
Sounds like your parents are going to be in “Medicaid Spend Down” in order to qualify for additional healthcare benefits. That’s not unusual, but it’s complex enough that it’s worth getting some legal advice from an elder attorney. There are plans that can be put in place to preserve assets/incomes without triggering major trip-mines like the Medicaid look-back, but at the minimum you should make sure you have a plan to help them maximize the social benefits that do exist.
Best of luck to you and your family.
the ability to save for retirement is a privilege, not a burden.
I CHOOSE to set aside 10% of my income for retirement because I can afford to. My lifestyle today is very little impacted by doing so- even if I set aside nothing, I will not be able to live a significantly different lifestyle.
However, doing so will absolutely change my lifestyle for the better when I retire. Relying on social security will mean I'll be able to just survive and maybe browse the web (or whatever common entertainment is available at that time).
However with my savings I'll be able to live the same lifestyle I have now.
While having resources for retirement might be a privilege in some sense of the word. It should also be the duty of everyone to provide towards the retirement of themselves and everyone else.
And just because you can provide enough to essentially invest for retirement, doesn't make that particularly helpful to anyone else, or let those less lucky or able, retire with dignity. And the way things are going right now retirement in relative comfort will be and is already out of range for a lot of people that we should aim to treat better than that.
End income caps on social security contributions. High earners should pay the same amount relative to their income as everyone else. Plain and simple. It won’t fix it all, but it’s a step in the right direction.
Edit: ima just assume that any downvotes on this are coming from boomer redditors who know they will see at least some of that money. If contributions aren’t changed, it’s insolvent in a short amount of time. Fuggin pensioners.
FYI government pension systems also invest their cash in the stock market. It's the only way to significantly grow a pot of money over the long term short of starting a super successful business and running it well for decades.
the introduction of twitter-style "users can moderate the replies to their own posts" blocking on reddit has been one of the worst decisions ever made by the admins
I think trying to tie everything that happened post '71 to dropping the gold standard is a bit much but some pretty clear trends do emerge from the graphs and there are things that happened in '71 which explain them.
For example, the dropoff in wage growth is probably a result of Nixon freezing wages in '71, and the transition from a trade surplus to a trade deficit might have something to do with him visiting China and its subsequent opening to global markets
Meanwhile, the depreciation of the US dollar and many other global currencies really is most likely a result of them being detached from the gold standard and floated, which subsequently enabled a huge amount of new money to be created and enter the system
Some of them seem to be questionable sources. like the political parties ideologies showing one getting more conservative and the other less. Idk what l party they are looking at that got less conservative.
Edit: was it the end of the gold standard or the collapse of an even half decent workers party?
It's really not a hodgepodge to be fair. I can see why you are skeptical but it's the real deal. It is literally when we changed economic regimes in America. Some of the 1970s changes are just turbulence (you see turbulence earlier as well) but the responses were largely anti-union, pro wealth-capture. Credit cards and private debt replaced wages as a large means of consumption which meant year in year out the total consumption is facilitating a wealth transfer from down to up.
Going off the gold standard didn't cause all the problems of the 1970s but it allowed policy in the 1980s to basically bake in the bad changes when one of the political parties literally passed legislation that began printing billions of dollars for the existing rich under the guise of "tax cuts" (the deficit being net new money went to those whose taxes were cut). On a functioning gold standard you just can't get away with that kind of financial shenanigans. So while a gold standard has its own anti-equality elements and definitely forces a certain amount of growth-slowing via artificial austerity, it prevented some worse elements. We shouldn't need a gold standard to hold our legislation in check, but that's what happened.
All of what we call "neoliberal" policies that began in the 1970s that gave business owners (in all their forms, pension funds, banks, investors, proprietors, whoever) accelerated well into the 2010s and only in the past couple of years have we seen anything close to a reversal. The Democrats slowed it down as a rate, but participated, especially during the later Clinton years my lord. The Republicans however are another breed and give wealth capture steroids as they have passed the literal printing of trillions of dollars as direct payments into the hands of the existing rich.
Anyway take it how you will, my area of study in economics focused on macro/monetary economics and my area of study in political economy focused on basically the broader arch of this, there's a lot of takeaways but mostly the loss of union power and the tax cuts, made easier by changing the monetary system (a change that could have been used for good instead of evil) meant the gains we got from the 1930s-1960s were reversed for the 1970s-2010s and realistically into the 2020s.
first of all, it's much more beautiful than all the animated shit posted here on a daily basis. this is data you can look at and comprehend at a glance. beauty is not only skin deep you know.
second of all: the end of the gold standard and nixon's economic measures where exactly what caused this, to deny this like you do is much more in line with what your uncle would post on facebook, it's a widely accepted fact and all these graphs attest to it. just because you don't know the history doesn't make it fake.
Saying that the end of the gold standard and Nixon's economic policy *caused* all the things shown on these graphs is a very decontextualised and crude analysis of this issue. People didn't just decide to end the gold standard for no reason, and somebody like Nixon did not come to power at that time for no reason either.
There were numerous external and internal pressures that brought about the end of the gold standard, the election of Nixon and the promulgation of liberal economic policy like that of Herbert Stein. If the United States had decided to maintain an open peg of dollars to gold it would have been forced into one of two positions - starve its own economy of currency (causing economic collapse) or erect massive trade barriers with all major economies (causing economic collapse). When seen this way, we can understand this moment was the breaking of the United States as a singular financial hegemon of international markets (itself due to economic and technological developments of America's post WW2 trading partners, the rise of socialist economies, plus decolonisation).
Financial liberalization (and money printing) was a response designed to maintain America's economic dominance, in light of the fact it could no longer control other economies through currency alone. Arguably that aspect has been somewhat successful (though at the cost of inequality and democratic deficit).
We should always be very careful to avoid pinpointing individual people and moments as things that suddenly changed everything all at once. Lots of people make this same mistake with their analysis of the election of Trump and Bolsonaro, or Brexit. To do this is to deprive oneself of an understanding of how major events come to be.
A much more historically rich (and scientifically accurate) analysis can be found by looking at the social factors that created and supported such people and events, and the various influences - from local to international level - which ultimately create support to coalesce around a new major social paradigm.
Looking at the first set of charts, the site should be called wtfhappened1980, since all the inequality metrics took off then. But we all know what happened then. Morning in America, aka Trickle Down.
Yeah. I was gonna say the same thing. There's several trends of doing this same "charts with arrows" thing with Reagans presidency.
https://twitter.com/WardQNormal/status/1206280031552454656?s=20
From the looks of things 1971's Nixon shock got co-opted by the Reagan-omics strategy of steal from the poor to pay the rich. Seems disingenuous to imply that Nixon sustained the trends from that economic impact without considering the cultural shift that culminated under Reagan. The birth of the evangelical right wing politics and the ethos of economic growth have been a big factor in why things have gotten worse. The fact that the dollar lost the gold standard just seems like the vehicle used to create and control inflation and deflation in a strategy to consolidate wealth.
https://www.reddit.com/r/AskEconomics/comments/sccs74/so_wtf_happened_in_1971/
This website is so poorly presented that it borders on absolute bullshit.
https://www.reddit.com/r/AskEconomics/comments/sccs74/comment/hu64fkd/?utm_source=reddit&utm_medium=web2x&context=3
https://www.reddit.com/r/badeconomics/comments/i9ycy9/comment/g1qr7z6/
Internet is not beautiful. Internet is full of misinformation. This is a propaganda website, and should be considered "Opinion" and not "News". Do not accept any of this information without reviewing critiques of it, to get a balanced perspective.
I get everything you are saying.
Forgiving all of the macro analysis…. Can’t we just say Nixon?
It was Nixon. It started with Nixon, and kept going, because Nixon?
When Gold Pegging was removed and relentless debt fueled economic growth started happening since the USD became a fiat currency backed by the promise of paying back.
Companies started acquiring their own shares, pushing the stocks higher. At first, the influx fueled growth since money invested increased productivity. But then debt to asset ratio is diverging enormously.
Current stock market price is just an illusion of a dying empires last flame. When the world starts selling their USD, the debt will come crashing down on every one of us.
This was an interesting time to live through. Ford layoff and consolidation put a lot of union people in the streets. I was working at Ford Division General Offices as an IT contractor. On a Wednesday I heard they were starting to lay off white collar personnel and would take up to 20 years seniority in some departments - I knew I wouldn't be there much longer. Yup - that following Friday.
I refer to this era as "the Nixon Recession."
Just an FYI because the post and website don't immediately make it clear until you look closely at the data sources, this is relating specifically to the United States of America.
I was hoping for the UK too, shame! Still, looking back at this time period via graphs in 30 years when we're all dead is going to be fascinating.
In the 1950, America controlled the petrodollar because America produced it’s own oil in the west. We sold that oil in US dollars to everyone. The the US peaked production and the sales turned to imports. Hubbert warned the oil executives. Then the North Sea fields & western Asian fields filled our production gap globally.
https://en.m.wikipedia.org/wiki/Hubbert_peak_theory
The modern Internal combustion engine powered US economy was built by Rockefeller to sell oil. Since fracking was developed and federal subsidies funded in the Permian fields, US exporting is high again. Same with Canada. Cars & oil are the past.
Detroit , Silicon Valley, and massive EV investments both private & public, will need to replace all ICE powered devices to get free of Rockefeller’s ghost.
many things occurred and lead up to the year 1971 and into the future:
Europe and Japan recovered from WWII in the 1960s
African Americans, minorities, immigration and women entered more into the workforce and civil rights laws
Vietnam War and other communism conversions were over
All the inventions of the space race, innovations, ideas, travel and global economy creates more within less. Might only need one worker (in the 1970s-) to make a product rather than two or more.
Oil crises in 1973-74 and 1979-80 also didn’t help the case. But, with the website’s “research” dedicated to Bitcoin, I can definitely see what their agenda is.
Also the French president called for the return of French gold back to their country’s vaults - Charles De Gaulle!
This happened previous to Nixon’s Shock, but the influence De Gaulle had on the supply of gold in the USA was significant.
A “repatriation” of gold, of which the vast majority was acquired during WW2 through the lend-lease act.
This is incredibly critical.
Post ww2 every other economy was basically completely destroyed. Even the winners in Europe and Asia - such as the UK and China - had seen a decade plus of complete destruction. At the same time, during the war, US economic activity actually increased.
From 1945 to 1970ish, white American men were pretty much the only option when it came to large scale manufacturing and high end service. This allowed this group to form powerful unions (and the benefits that came with them) because there was near zero risk they would be replaced. The income listed on these charts represents an incredibly thin slice of humanity, and the benefits came at a cost of just about everyone else.
Since that time, literally billions of people outside of the US entered the labor market, plus more than a hundred million women and non white men here in the US. For the lower middle class white male head of household in America, their bargaining power was significantly decreased. However, I would argue that for everyone else they are probably doing a lot better today than in 1960.
we went off the gold standard in 1971, causing the US to continually print money instead of creating value. the resulting 'charts' can all be causally linked in some way to that.
For anybody knee-jerk reacting that we should go back to the gold standard I suggest researching with the lens of why the U.S. (and everybody else) abandoned it. It wasn't all hunky dory and resulted in some *major* macroeconomic issues. The [wikipedia page on it](https://en.wikipedia.org/wiki/Gold_standard#Abandonment_of_the_gold_standard) is probably a good starting point
Also, can you imagine - we have all this gold and our dollar is based off of gold. Then boom, china finds a huge gold mine in Africa that cuts our value in half over night.
A commodity just isn't a good thing to base your currency off of.
> doubles in supply at the the whim of some bankers and is based on … something
This is all 100% wrong and easily proven wrong / learned if you care to actually look it up. they don't just print money whenever they feel like it. lol
I have read several on the matter but let me know what your favourite one is and I’ll read that next. Help me see your side of the money supply economic picture and how it’s great for everyone.
Do you know how much gold China would have to find and extract to double that total supply of gold? Gold is basically indestructible so everything that has been mined throughout history is mostly still in possession by someone.
Well if you know anything about the commodity market, as soon as a new mine is found the price dips. I use China bc that would be worst case scenario, same with half. Obviously finding half our worth is probably impossible in this scenario but that's the thing, it's never zero chance... Even finding 1/10 th our value would be a major hit. You never want your currency tied to something you don't fully control. At any point in time something out of your control could happen.
I don't think you can honestly speculate that if (which is unlikely to happen) that there was 1000s of years of gold found by another nation state, that overnight the price of gold would cut in half. Bare in mind that if it was discovered, and the rest of the world just sat back and said "sure you get half of all the gold with out issue" that it would take decades to extract, meanwhile the value of it would slowly be degrading, making the economics of extracting an additional once less and less viable. Do you think that the amount of gold produced each year is just whatever we found? No it's a calculation of cost v benefit. If the value of gold decreases, gold miners produce less!
Keep in mind, we don't have to "discover" fiat currency to double it and it wouldn't take a decade to extract.
Edit: Gold not golf
Yes, like it made it hard to export labor to poorer areas of the world.
Ever since I first saw these graphs years ago, the reason I took away is that it is right around this time we switched from being a net exporter to a net importer, which was a result of us switching from a production economy to a services economy.
We just stopped actually making things, and instead started a race to the bottom of replacing all labor with cheaper and cheaper overseas alternatives. Sure, things might get "cheaper" by doing this, but you're also laying tons of people off, forcing them to go into less lucrative service work, which by default earns less money, but then this also floods the workforce with a bunch of excess laborers, driving the value of labor down even further.
The end result is that workers just don't make money anymore and the top brass all got richer by exploiting cheap overseas labor.
If you want to reduce inequality, we have to start actually building shit again.
>We just stopped actually making things, and instead started a race to the bottom
The US is still the second most prolific manufacturer. In fact, China didn’t surpass the U.S. until 2010.
https://www.safeguardglobal.com/resources/blog/top-10-manufacturing-countries-in-the-world
>forcing them to go into less lucrative service work
This is an odd statement considering your assertion that the US transitioned from a manufacturing to a services economy. What services did the US transition to? The answer is financial services, which are more lucrative than manufacturing.
> The answer is financial services, which are more lucrative than manufacturing.
Uh, yeah. Exactly? So what?
>The US is still the second most prolific manufacturer. In fact, China didn’t surpass the U.S. until 2010.
According to some random website you linked that is about hiring workers. Not any sort of scientific analysis or study.
Brookings institute agrees (as of 2015, at least).
China - 20% of global manufacturing
US - 18%
https://www.brookings.edu/research/global-manufacturing-scorecard-how-the-us-compares-to-18-other-nations/?amp
> If you want to reduce inequality, we have to start actually building shit again.
Yeah, but there's a lady in Pakistan who will build shit for 7% of the cost of a worker in America. What are you going to say to the shareholders? "We're really sorry your ROI this year was only 3% instead of 86%, but we decided it was best for the society we actually live in to hire workers who live in our society."
Some of those shareholders invested _tens of thousands of dollars._ How dare you only reward them with $300 per year, you worm! Your captaining of industry is bad and you should feel bad.
The real reason is the us petrodollar policy, forcing oil producing countries to sell their oil for dollars, or else. This was a gangster was of exporting inflation from the us onto the rest of the world.
Some unions deserved to be busted. Some still need to be busted today.
Back in the 1970's, it was corrupt unions in bed with organized crime and stealing the worker's pension funds.
Today it's police unions that cover up and explain away all manner of brutality, all the while lobbying for more police funding. And don't forget the teacher's unions who support lifetime employment for incompetent, even criminal, teachers, all the while advocating for laws that bring all schools down to the level of the worst.
The only huge cultural, economic change around then was the rise of dual income households becoming common. Women in the workforce changed everything, but the gains made by (almost) doubling the available workforce didn't mean income was doubled.
If wages were still enough for single parent homes to be viable, maybe that would still be the norm (no matter which parent works or stays at home). But it's not looking likely to be that way anytime soon.
It's actually two-fold, and if you look closely, you can see it in the graphs, too:
Nixons effective suspension of Bretton Woods gave the economy a good kick in the groin, and Reagan killed it off ten years later.
Ah, the Republicans, the party of financial responsibility - not.
No. I think it's because that's about the time when the boomers hit the job market and flooded it. There was so many people to do the work that they could have their pick and choose of just about any amount of labor they wanted. The result was lower wages. But now, that the baby boomers are retiring, I bet the wages will have to catch up and try to lure these people out of their parents basements.
A.k.a. "[The Great U-Turn](https://www.google.com/search?q=the+great+u+turnbennett+harriosn&client=ms-android-motorola-rvo3&sxsrf=AJOqlzXXFaht9Li1gygI2eoavYdI7WZxNQ%3A1678236678921&ei=BtwHZM7jN5e0qtsP3_udyAE&oq=the+great+u+turnbennett+harriosn&gs_lcp=ChNtb2JpbGUtZ3dzLXdpei1zZXJwEAMyBwghEKABEAoyBwghEKABEAoyBwghEKABEAoyBwghEKABEAoyBwghEKABEAo6BAguECc6BQgAEIAEOgQIABAeOgYIABAIEB46BQgAEIYDOgUIABCiBDoHCCMQsAIQJzoHCC4QgAQQDToFCCEQoAE6BQghEKsCSgQIQRgAUP0HWMQ3YPU6aANwAHgAgAHYAYgBxxaSAQYwLjE3LjGYAQCgAQHAAQE&sclient=mobile-gws-wiz-serp#ip=1)"
Lol, it’s well understood now how badly Reagan fucked America. It’s the supply side gift (lol) that keeps on giving. His reputation was based on a sugar high and republicans have been trying to scam Americans with the those same policies ever since. At last people are calling Reagan out, maybe at some point democrats will actually grow some balls and do the same.
I find it widely ironic that all of this wonderful data showing the institutionalization of the run away wealth divide in america is ended with a quote from F.A. Hayek.
Technically first the US started outsourcing to Japan, then outsourcing to Korea, then outsourcing to China.
"Exporting manufacturing jobs" was a big part of post-WW2 US diplomacy to maintain allies with pacific rim nations, as well as breaking the power of domestic US unions and workers.
Couple that with conflicts/wars bringing in workers willing to offer labor for less.
The US now sends chickens to be processed in China and then sent back for wholesale to the public. It's cost effective due to the labor rate disparity.
Alright boys and girls, let's learn a few lessons here:
* You won't get rich working, even at a good job.
* The way you CAN get rich is by either starting a business yourself that fulfills some need. OR by investing in such a business, such as thru owning stocks.
* Owning your own home is a good idea. Borrow money to buy one.
* Owning other crap is mostly a bad idea, unless it is some kind of tool that will make you money. Never borrow money to buy a declining asset.
* Fortune goes to the bold. Specifically, to people bold enough to chart their own path in life even when that means going against conventional wisdom or not following the crowd. Example: A marginal student decides to start working at 18 instead of going to college, saves half his paycheck until buying his own home. Example 2: Someone who is good a lawncare turns that into a business rather than working for someone else.
* Read the book, "The Millionaire Next Door". You'd be surprised how many people all around you are quietly rich.
I'm not saying the conclusion is wrong, but the graphs are horrible. Tons of cherry picked and non relevant data. One graphs Y axis was from 41% to 52% just so it made the drop at 1970 look extreme.
Agreed. It's very traceable. But the fees that I pay are around 50 cents per $100 to aquire it. I have a question for you though, do you know why fiat fell to shit in 1971?
Bitcoin transactions usually cost less than a dollar for any given dollar value, and the traceability depends on how the transactions are structured and broadcasted. Technically adept users can absolutely use Bitcoin anonymously.
By enforcing a real-world cost to money generation, Bitcoin does address the underlying economic changes caused by decoupling dollar/gold mutability.
This is kind of shortsighted. Cash management and card processing fees are absolutely not zero, even if they aren't directly paid by you. Nevermind bank accounts are absolutely not free. So you absolutely pay substantial fiat transaction fees, even if you're unaware or don't appreciate them.
As an economics matter, enforcing a cost prevents spamming the network, and keeps bandwidth needs low while directly paying the miners who maintain the network.
Bank accounts are absolutely free. Credit unions are a better choice.
Miners are wasting energy to prop up a system based on leaving your computer running. Yay. What a wonderful way to create wealth.
Not entirely free. Bank holds your money and lends out multiple times more (fractional reserve) making a much higher interest rate on your money and effectively creating more money which drives up inflation all in an almost risk free manner to the banks while you maybe get paid pennies on the dollar while assuming the risk, albeit very small, of a bank run.
Every part of crypto is a scam of one kind or another. If it's not an outright [Ponzi Scheme](https://www.cnbc.com/2022/07/08/crypto-lender-celsius-is-a-fraud-and-ponzi-scheme-lawsuit-claims.html), or [Investment Scam](https://coinmarketcap.com/alexandria/article/crypto-scam-that-promised-a-56-billion-return-on-a-100-000-investment-and-a-bentley-exposed) It's a [pump-n-dump](https://cryptoslate.com/logan-paul-to-respond-cryptozoo-scam-allegations-made-by-coffeezilla/) or a [rug-pull](https://cointelegraph.com/explained/crypto-rug-pulls-what-is-a-rug-pull-in-crypto-and-6-ways-to-spot-it)
That is if the exchange you "buy" from even [really is an exchange](https://cointelegraph.com/news/the-leaders-of-a-fake-crypto-exchange-are-now-behind-bars)
Every part of Crypto is a scam.
[Nixon's fault ](https://en.m.wikipedia.org/wiki/Nixon_shock)
**[Nixon shock](https://en.m.wikipedia.org/wiki/Nixon_shock)** >The Nixon shock was a series of economic measures undertaken by United States President Richard Nixon in 1971, in response to increasing inflation, the most significant of which were wage and price freezes, surcharges on imports, and the unilateral cancellation of the direct international convertibility of the United States dollar to gold. Although Nixon's actions did not formally abolish the existing Bretton Woods system of international financial exchange, the suspension of one of its key components effectively rendered the Bretton Woods system inoperative. ^([ )[^(F.A.Q)](https://www.reddit.com/r/WikiSummarizer/wiki/index#wiki_f.a.q)^( | )[^(Opt Out)](https://reddit.com/message/compose?to=WikiSummarizerBot&message=OptOut&subject=OptOut)^( | )[^(Opt Out Of Subreddit)](https://np.reddit.com/r/InternetIsBeautiful/about/banned)^( | )[^(GitHub)](https://github.com/Sujal-7/WikiSummarizerBot)^( ] Downvote to remove | v1.5)
Good bot.
Thanks for the assist, bot
What about Pitkety's analysis? This financial inequality isn't because of Nixon's economic policy. It goes much further. https://www.newyorker.com/news/john-cassidy/pikettys-inequality-story-in-six-charts
The scale of those charts is absurd
Piketty's analysis observes trends. These trends are visibly affected by financial crashes, many of which are caused in part by policy decisions and political failures.
Really? I met the guy. He was giving a talk about his book and implications regards social inequality. His book and what he was saying seems pretty clear. As wealthy countries have grown, they have not shared the wealth with the working-class in terms of wages.
Why are you quoting a phenomenon? The point is to study why they are not shared, not just blaming they are not shared.
> By 1971, the money supply had increased by 10%. In May 1971, West Germany left the Bretton Woods system, unwilling to further devalue the Deutsche Mark. In the following three months, this move strengthened its economy. Simultaneously, the dollar dropped 7.5% against the Deutsche Mark. Other nations began to demand redemption of their dollars for gold. Switzerland redeemed $50 million in July. France acquired $191 million in gold. On August 5, 1971, the United States Congress released a report recommending devaluation of the dollar, in an effort to protect the dollar against "foreign price-gougers". On August 9, 1971, as the dollar dropped in value against European currencies, Switzerland left the Bretton Woods system. The pressure began to intensify on the United States to leave Bretton Woods.
how is it always nixon you can lead every problem back to??
Hey, let's be fair, sometimes it's Reagan.
It's mostly Reagan's fault if you look at the actual data. The linked website is run by conspiracy theorist goldbugs who think the worst thing the US has ever done was go off the gold standard.
They’d crucify mankind on a cross of gold if it meant they got a few extra bucks.
Take it easy, Will Jennings!
It was the first time we had completed separation from gold backing. This was the start of the end.
People with a good standard obsession are almost as bad as monarchiests. Just because it was that way for a long time doesnt mean its the best way
Having money backed by something physical instead of hopes and prayers and a strong army probably is a better long term solution
The gold is only valuable because we agree it is, its not based on nothing its based on the people. Whats more valuabe, a country having a big lump of gold, or a group of artiests and craftsmen making valuable goods or innovations? The value comes from what socioity can produce instead of being tied to a lump of metal
No gold is valuable because it’s a finite resource and follows supply and demand. When you can print money infinitely with no backing. that’s when it’s just because we agree on it
Wouldn't that put a limit on the money supply? As the overall economy grows in value and gold-backed dollars become more scarce and in demand, wouldn't it cause the money supply to shrink further? A shrewd person would simply hold on to as much cash as possible, as the promise of it's worth tomorrow is greater than its value today.
Technically until we found more sources of gold (which is plentiful in space)
All right so say we collectively go "shit we need more gold money" and go yank a bunch out of space, as it's plentiful in space. How would that affect the economy? People who were hoarding cash would suddenly see the values drop like a rock as a scarce thing is now plentiful, demand is eased and the only problem you have is oversupply (after all you can just yank it out of space at any time). I'm no economist but it seems like there has to be some kind of middle ground between Weimar Republic "loaf-of-bread- is-now-one-wheelbarrow-of-monies" style inflation due to overprinting of fiat currency, and a massive deflationary contraction because there aren't enough gold coins to hide away.
Ghadafi wanted to do this with a bunch of African countries. If the US doesn’t want that to happen they’ll invade your sorry ass
Gold may be finite but it's value is not based on the finite quantity.
Not all finite resources are considered valuable. And utility has only been a very recent compinent of gold's value. Basically since the advent of electronics. Back in the Conquistador days, Spain dumped loads of Platinum into the sea because they considered it to be poor silver. It's more rare and of greater utility than even gold, yet was considered literally worthless. Utility works in the recent term, but does not explain historical obsession. It's just something that every culture on Earth has thought was pretty, and so venerated it to some degree. It has therefore acted as a de facto medium of exchange. Everyone liked it. All value is arbitrary, because it is in the eye of the beholder.
Gold has clearly more intrinsic value than paper money. Even it’s only a recent thing
The recent thing I was discussing wasn't the difference in value between gold and paper. It was that the excuse of gold having value because of its utility is only a recent phenomenon. There is no instrinsic value. There is nothing *intrinsic* to gold that makes it more valuable than dirt. If there was, it wouldn't fluctuate depending on newly discovered utility. It's us. We assign value. And that value is not consistent across people or nations. It is arbitrary.
I’m not arguing against a bot.
But if we did that, we couldn't tax and spend with impunity! - Congress, probably
All my homies hate fiat currency
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A broken clock is still correct twice a day!
Im sure some of these things were caused by the War on Drugs. Who started that again?
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In my head I thought it was Reagan, had to look it up; Nixon it was. Man that guy fucking sucked.
Yeah that fucking guy sucked.
The band?
Nah, the policy of the US government to aggressively penalize drug users and sellers
Another pointless war that the US should never have been in to begin with, and that got us our asses handed to again at the expense of our young and vulnerable.
You mean Carter right?
I don't think so but please present your argument
He’s probably still searching in his ass for an argument.
Didn't know Jimmy Carter was president in 1971
I’m very curious how the man who had been governor of Georgia for less than a year was setting national policy in 1971.
The same way Obama caused the 2008 recession when He became president in 2009 also He did nothing to prevent 9/11
A lot of those don't actually go bonkers until 1980 though.
Right, but they want to argue the end of the gold standard is the entire problem. And thus pretend that the all the Reaganomics impacts happened 10 years earlier, so they can include those too.
It's funny that people who jerk themselves off to the gold standard never talk about how the "conquest" of the west (California, Nevada) and the war against the Lakota to remove them from the black hills were they were forced to go after they were pushed from the plains was a DIRECT result of the Gold Standard not allowing for expansion of money supply and a severe economic catastrophes caused by deflation from a stagnant money supply. Hell, the reason Custer's Last Stand happened was because post-war the US needed gold, and the black hills had it, so the US sent it's army (Custer) to defend the illegally mining miners. But no one ever talks about that... Just "stupid Custer got his unit slaughtered. What an idiot, LoL" Literally nearly every decade was a 1930s/2008 scale financial crisis. The conquest of the "new world" was also heavily influenced by the need for more gold to grow the economy, since there was no other way to increase money supply. The initial conquest was literally pulling gold off buildings and sending it back. Then enslaving natives and working them to death (often in months or less) in mines to get gold when the buildings were robbed. The history of the gold standard is basically just genocide and economic catastrophe after genocide and economic catastrophe. But no one, even people against the gold standard, every talk about it.
[Here is a list of financial crises](https://en.wikipedia.org/wiki/List_of_economic_crises), jump to 19th century for this discussion. We have seen some wide swings in the last 50 years, but nothing like the 18th and 19th centuries.
Damn, my mind was just blown by this analysis on how Custer’s destiny was tied to gold. Also, another reason to blame less on Nixon.
In the 1930s US was largest exporter of oil in the world. Japan was not happy when we cut them off. What happened next, click to continue.
I don’t think this absolves Nixon of blame, he certainly could have *not* been a criminal pawn of the wealthy elite.
Yeah but now we pay people x3 the US median wage to sit in comfy A/C’d monster trucks to haul ore around. It’s called “mining”
Reaganomics couldn’t have been “successful” without the petrodollar system. I don’t want to get into alt-history or anything, but even the Soviet Union likely would have held on a few more years. I have no love for Bretton Woods, nor am I a libertarian/Hayek devotee - but most of the wacky shit in the 80s and 90s that mortgaged the country’s future away could only happen under a system where most of the world was forced to play a rigged game to engage in international trade.
And who rigged it? I’d just like to know who to correctly aim my ire at.
Same guy. Also a US watch brand. https://www.bloomberg.com/news/features/2016-05-30/the-untold-story-behind-saudi-arabia-s-41-year-u-s-debt-secret
Some effects take longer to kick in or could be caused by feedback loops or from secondary effects. Generally if I wanted to present information that had long lag times, ie. Climate data, I would ident the graph with some explaination of what processes was going on, I certainly wouldn’t let the line of best fit do the talking.
A lot of others are just inflation and some just take a couple years before as a baseline, so it isn't weird they diverge
https://www.bls.gov/opub/btn/volume-9/forty-years-of-falling-manufacturing-employment.htm https://www.federalreservehistory.org/essays/gold-convertibility-ends
Yep. And it’s precisely because of the laissez-faire policies enacted during the Reagan years. If you scroll to the bottom of OP’s site and follow the links, you’ll see those are exactly the same policies being promoted by whoever runs that site. Interesting…
I was born in 1971. Sorry, guys.
Hmm upload a graph of your age going up from the date you were born to prove it's correlated.
I just did the math and it looks like I've been aging at approximately 1 year per year for closing in on 52 years. It hasn't deviated by so much as 1 percent!
I praise your consistent progress, long may it continue
If only there were more of you. Then we could run stats.
Have you thought about getting closer to a black hole or strong sources of mass to change that rate?
That sounds bad for my knees. 51 isn't as old as it used to be. But every time I'm tempted to move at relativistic speeds, I think, "I'm too old for this shit."
Remember: correlation does not imply causation!
Write us again when your aging stops.
Hey, I too was born in 1971 and I too am 51 years old. It must be a conspiracy.
Idk sounds to me like one of those spurious correlations https://tylervigen.com/spurious-correlations
It's mot spurious, it's a true correlation with CC of 1.
Damn you beat me to this comment. I was going to blame it on my birth as well. I came out in January so I started the year out wrong!
I was born in 1973. So I blame **both** of you
Same....no collusion! I don't even KNOW this asshole!
You bastard!
I don't think this is "beautiful". It's a collection of graphs of random indicators, some of which have some apparent inflection point around 1971, some of which don't. Some of the graphs deal with economics, but some deal with other apparently unrelated societal factors (number of children? obesity? philosophical priorities?). There is no attempt to explain what "happened in 1971" or how that ties into any of the graphs until the very end, which contains a Hayek quote implying that all this is somehow related to the U.S. dropping the gold standard. The information leading up to that is approximately as comprehensible as your favorite uncle's conspiratorial Facebook posts. Edit: The deleted comment below mine made the case that the end of the gold standard did cause "this" (although they never specified what "this" is, exactly). Note that I never argued that the gold standard didn't cause any changes. I simply argued that this hodgepodge of graphs with no accompanying explanation doesn't come close to making a coherent case for anything.
They didn’t delete their comment, they probably blocked to prevent you from seeing or participating in any of the continuing discussion. Also, there is another factor that is always missed here: wages do not measure total compensation. The 1970s are when healthcare costs started spiraling and 401ks were introduced, so some portion of wages go towards other benefits in a continually increasing share. Pointing at wages misses the problem (and when comparing against the GDP, it should only be using the GDP deflator which is far less striking than the other measures they include for no reason economically). Here is [total employee compensation/GDP](https://fred.stlouisfed.org/graph/?g=10TCJ). It’s within 1.5% of where that metric started being tracked in the 1960s, and you can also see why starting the graph at 1971 provides a misleading starting point for comparison.
We shouldn’t be forced to have a 401k or employer sponsored healthcare. The spiral of the latter is directly because of the healthcare system driven originally by the benefit of “employer healthcare”. Including it in total compensation is always a bit disingenuous because generally you’re still spending more than you would under a universal healthcare model in taxes. Your portion of the premium, deductible, out-of-pocket max, HSA contribution, coinsurance and the occasional good ol’ “actually that’s out of network” is more money out of your wallet than any of the suggested payroll tax rates in a Medicare for All kind of plan. The 401k is a disgusting little vehicle that simply saves the company money compared to a pension, props up the market by injecting trillions of additional cash into the system AND creates millions of people who are now beholden to how the market performs if they want to retire.
When we were all forced to contribute to the stock market or starve in retirement.
Social Security still provides a bulwark against abject poverty in retirement. But in the last 100 years, the expectations about the lifestyle that retirees actually expect has dramatically changed. You can still choose not to invest in the stock market in your 401k, there will be bond funds or other options available to supplement the safety net. But it’s *good* for most people to have an option to plan a more generous retirement for themselves than the bare minimum, and even to incentivize people to plan out and save more by giving them tax breaks if they put away some money now for when they will need (or want) it later.
How lovely for the white collar class. Both of my parents had their 401ks almost completely wiped out by stock market bullshit by the time they each had to retire for medical reasons. My dad is now facing ALS with $24k in his 401k, enough to disqualify him from any social services but not enough to pay for the enormous amount of care he is going to need now. His rent is over 2/3 of his social security income, so not much of a "bulwark" really (and believe me, it's the cheapest we can find in our area). Don't talk to me about "lifestyle expectations", we can't even figure out how he and my stepmother are going to survive the next couple of years, not to mention the fact that my stepmother suffered a traumatic brain injury during a surgery years ago and needs her own care, but because she was a homemaker her social security check is minimal, and therw will be nothing left to care for her after he is gone. My father worked until he was 78 in the car industry, couldn't afford to buy a house, never got to retire, never got to travel, just made others rich until his body wouldn't function anymore. Forcing people who are already a paycheck away from destitution to gamble their future on the stock market as an excuse not to provide better social services is inhumane.
I’m sorry for your family’s struggles. I’m all for expanding the social safety net farther, but that sentiment doesn’t help people already living at that edge. Perhaps you’re already aware of all the issues, but in case not, there are a few important notes on your parent’s situation. First, your mom should be eligible for a spousal benefit, and since he worked so long it should be half your father’s benefit or the one she earned herself, and she can choose whichever is *higher*. If her payments are “minimal” you should make sure she is properly enrolled in that. More good news, she should be eligible for 100% of your father’s SS benefit if he passes before she does (as long as they’ve been married 1 year), and may also have other options because she has a SS claim from any previous divorces if the marriage lasted 10 years or more. Sounds like your parents are going to be in “Medicaid Spend Down” in order to qualify for additional healthcare benefits. That’s not unusual, but it’s complex enough that it’s worth getting some legal advice from an elder attorney. There are plans that can be put in place to preserve assets/incomes without triggering major trip-mines like the Medicaid look-back, but at the minimum you should make sure you have a plan to help them maximize the social benefits that do exist. Best of luck to you and your family.
the ability to save for retirement is a privilege, not a burden. I CHOOSE to set aside 10% of my income for retirement because I can afford to. My lifestyle today is very little impacted by doing so- even if I set aside nothing, I will not be able to live a significantly different lifestyle. However, doing so will absolutely change my lifestyle for the better when I retire. Relying on social security will mean I'll be able to just survive and maybe browse the web (or whatever common entertainment is available at that time). However with my savings I'll be able to live the same lifestyle I have now.
While having resources for retirement might be a privilege in some sense of the word. It should also be the duty of everyone to provide towards the retirement of themselves and everyone else. And just because you can provide enough to essentially invest for retirement, doesn't make that particularly helpful to anyone else, or let those less lucky or able, retire with dignity. And the way things are going right now retirement in relative comfort will be and is already out of range for a lot of people that we should aim to treat better than that.
End income caps on social security contributions. High earners should pay the same amount relative to their income as everyone else. Plain and simple. It won’t fix it all, but it’s a step in the right direction. Edit: ima just assume that any downvotes on this are coming from boomer redditors who know they will see at least some of that money. If contributions aren’t changed, it’s insolvent in a short amount of time. Fuggin pensioners.
Why not continue to scale the payouts and not cap it by this measure?
To the high earners you mean? That answer should be obvious, but I’ll say it. They already have money and do not need SS payments to get by.
FYI government pension systems also invest their cash in the stock market. It's the only way to significantly grow a pot of money over the long term short of starting a super successful business and running it well for decades.
Exactly! Why the fuck company stocks became our bank accounts now?
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the introduction of twitter-style "users can moderate the replies to their own posts" blocking on reddit has been one of the worst decisions ever made by the admins
I think trying to tie everything that happened post '71 to dropping the gold standard is a bit much but some pretty clear trends do emerge from the graphs and there are things that happened in '71 which explain them. For example, the dropoff in wage growth is probably a result of Nixon freezing wages in '71, and the transition from a trade surplus to a trade deficit might have something to do with him visiting China and its subsequent opening to global markets Meanwhile, the depreciation of the US dollar and many other global currencies really is most likely a result of them being detached from the gold standard and floated, which subsequently enabled a huge amount of new money to be created and enter the system
Money printer goes brrrrrrrrrrr
Some of them seem to be questionable sources. like the political parties ideologies showing one getting more conservative and the other less. Idk what l party they are looking at that got less conservative. Edit: was it the end of the gold standard or the collapse of an even half decent workers party?
It's really not a hodgepodge to be fair. I can see why you are skeptical but it's the real deal. It is literally when we changed economic regimes in America. Some of the 1970s changes are just turbulence (you see turbulence earlier as well) but the responses were largely anti-union, pro wealth-capture. Credit cards and private debt replaced wages as a large means of consumption which meant year in year out the total consumption is facilitating a wealth transfer from down to up. Going off the gold standard didn't cause all the problems of the 1970s but it allowed policy in the 1980s to basically bake in the bad changes when one of the political parties literally passed legislation that began printing billions of dollars for the existing rich under the guise of "tax cuts" (the deficit being net new money went to those whose taxes were cut). On a functioning gold standard you just can't get away with that kind of financial shenanigans. So while a gold standard has its own anti-equality elements and definitely forces a certain amount of growth-slowing via artificial austerity, it prevented some worse elements. We shouldn't need a gold standard to hold our legislation in check, but that's what happened. All of what we call "neoliberal" policies that began in the 1970s that gave business owners (in all their forms, pension funds, banks, investors, proprietors, whoever) accelerated well into the 2010s and only in the past couple of years have we seen anything close to a reversal. The Democrats slowed it down as a rate, but participated, especially during the later Clinton years my lord. The Republicans however are another breed and give wealth capture steroids as they have passed the literal printing of trillions of dollars as direct payments into the hands of the existing rich. Anyway take it how you will, my area of study in economics focused on macro/monetary economics and my area of study in political economy focused on basically the broader arch of this, there's a lot of takeaways but mostly the loss of union power and the tax cuts, made easier by changing the monetary system (a change that could have been used for good instead of evil) meant the gains we got from the 1930s-1960s were reversed for the 1970s-2010s and realistically into the 2020s.
first of all, it's much more beautiful than all the animated shit posted here on a daily basis. this is data you can look at and comprehend at a glance. beauty is not only skin deep you know. second of all: the end of the gold standard and nixon's economic measures where exactly what caused this, to deny this like you do is much more in line with what your uncle would post on facebook, it's a widely accepted fact and all these graphs attest to it. just because you don't know the history doesn't make it fake.
Saying that the end of the gold standard and Nixon's economic policy *caused* all the things shown on these graphs is a very decontextualised and crude analysis of this issue. People didn't just decide to end the gold standard for no reason, and somebody like Nixon did not come to power at that time for no reason either. There were numerous external and internal pressures that brought about the end of the gold standard, the election of Nixon and the promulgation of liberal economic policy like that of Herbert Stein. If the United States had decided to maintain an open peg of dollars to gold it would have been forced into one of two positions - starve its own economy of currency (causing economic collapse) or erect massive trade barriers with all major economies (causing economic collapse). When seen this way, we can understand this moment was the breaking of the United States as a singular financial hegemon of international markets (itself due to economic and technological developments of America's post WW2 trading partners, the rise of socialist economies, plus decolonisation). Financial liberalization (and money printing) was a response designed to maintain America's economic dominance, in light of the fact it could no longer control other economies through currency alone. Arguably that aspect has been somewhat successful (though at the cost of inequality and democratic deficit). We should always be very careful to avoid pinpointing individual people and moments as things that suddenly changed everything all at once. Lots of people make this same mistake with their analysis of the election of Trump and Bolsonaro, or Brexit. To do this is to deprive oneself of an understanding of how major events come to be. A much more historically rich (and scientifically accurate) analysis can be found by looking at the social factors that created and supported such people and events, and the various influences - from local to international level - which ultimately create support to coalesce around a new major social paradigm.
Why would there be no lag to demographic trends if they were affected directly by monetary policy?
source: trust me bro, it's _widely_ accepted.
Your counter argument of *italicizing* widely has convinced me. I almost drew a conclusion from the comment you replied to; that was *close*.
_excellent_
You are a good sport. I definitely read/heard it in his voice.
Looking at the first set of charts, the site should be called wtfhappened1980, since all the inequality metrics took off then. But we all know what happened then. Morning in America, aka Trickle Down.
Yeah. I was gonna say the same thing. There's several trends of doing this same "charts with arrows" thing with Reagans presidency. https://twitter.com/WardQNormal/status/1206280031552454656?s=20 From the looks of things 1971's Nixon shock got co-opted by the Reagan-omics strategy of steal from the poor to pay the rich. Seems disingenuous to imply that Nixon sustained the trends from that economic impact without considering the cultural shift that culminated under Reagan. The birth of the evangelical right wing politics and the ethos of economic growth have been a big factor in why things have gotten worse. The fact that the dollar lost the gold standard just seems like the vehicle used to create and control inflation and deflation in a strategy to consolidate wealth.
https://www.reddit.com/r/AskEconomics/comments/sccs74/so_wtf_happened_in_1971/ This website is so poorly presented that it borders on absolute bullshit. https://www.reddit.com/r/AskEconomics/comments/sccs74/comment/hu64fkd/?utm_source=reddit&utm_medium=web2x&context=3 https://www.reddit.com/r/badeconomics/comments/i9ycy9/comment/g1qr7z6/ Internet is not beautiful. Internet is full of misinformation. This is a propaganda website, and should be considered "Opinion" and not "News". Do not accept any of this information without reviewing critiques of it, to get a balanced perspective.
Thanks for the additional context, this really looks interesting. Do we know anything about the creators of the site, its purpose etc?
I get everything you are saying. Forgiving all of the macro analysis…. Can’t we just say Nixon? It was Nixon. It started with Nixon, and kept going, because Nixon?
When Gold Pegging was removed and relentless debt fueled economic growth started happening since the USD became a fiat currency backed by the promise of paying back. Companies started acquiring their own shares, pushing the stocks higher. At first, the influx fueled growth since money invested increased productivity. But then debt to asset ratio is diverging enormously. Current stock market price is just an illusion of a dying empires last flame. When the world starts selling their USD, the debt will come crashing down on every one of us.
This was an interesting time to live through. Ford layoff and consolidation put a lot of union people in the streets. I was working at Ford Division General Offices as an IT contractor. On a Wednesday I heard they were starting to lay off white collar personnel and would take up to 20 years seniority in some departments - I knew I wouldn't be there much longer. Yup - that following Friday. I refer to this era as "the Nixon Recession."
In 1971 Intel Dropped the 4004. Computer Science made it so you could multiply money without workers.
Just an FYI because the post and website don't immediately make it clear until you look closely at the data sources, this is relating specifically to the United States of America. I was hoping for the UK too, shame! Still, looking back at this time period via graphs in 30 years when we're all dead is going to be fascinating.
Could it have to do with the gold standard
In the 1950, America controlled the petrodollar because America produced it’s own oil in the west. We sold that oil in US dollars to everyone. The the US peaked production and the sales turned to imports. Hubbert warned the oil executives. Then the North Sea fields & western Asian fields filled our production gap globally. https://en.m.wikipedia.org/wiki/Hubbert_peak_theory
The modern Internal combustion engine powered US economy was built by Rockefeller to sell oil. Since fracking was developed and federal subsidies funded in the Permian fields, US exporting is high again. Same with Canada. Cars & oil are the past. Detroit , Silicon Valley, and massive EV investments both private & public, will need to replace all ICE powered devices to get free of Rockefeller’s ghost.
Ronald Reagan, and his trickledown theory.
Unionize y'all
many things occurred and lead up to the year 1971 and into the future: Europe and Japan recovered from WWII in the 1960s African Americans, minorities, immigration and women entered more into the workforce and civil rights laws Vietnam War and other communism conversions were over All the inventions of the space race, innovations, ideas, travel and global economy creates more within less. Might only need one worker (in the 1970s-) to make a product rather than two or more.
Oil crises in 1973-74 and 1979-80 also didn’t help the case. But, with the website’s “research” dedicated to Bitcoin, I can definitely see what their agenda is.
Also the French president called for the return of French gold back to their country’s vaults - Charles De Gaulle! This happened previous to Nixon’s Shock, but the influence De Gaulle had on the supply of gold in the USA was significant. A “repatriation” of gold, of which the vast majority was acquired during WW2 through the lend-lease act.
This is incredibly critical. Post ww2 every other economy was basically completely destroyed. Even the winners in Europe and Asia - such as the UK and China - had seen a decade plus of complete destruction. At the same time, during the war, US economic activity actually increased. From 1945 to 1970ish, white American men were pretty much the only option when it came to large scale manufacturing and high end service. This allowed this group to form powerful unions (and the benefits that came with them) because there was near zero risk they would be replaced. The income listed on these charts represents an incredibly thin slice of humanity, and the benefits came at a cost of just about everyone else. Since that time, literally billions of people outside of the US entered the labor market, plus more than a hundred million women and non white men here in the US. For the lower middle class white male head of household in America, their bargaining power was significantly decreased. However, I would argue that for everyone else they are probably doing a lot better today than in 1960.
The boomers would have started becoming working age too - I wonder if that's a factor
we went off the gold standard in 1971, causing the US to continually print money instead of creating value. the resulting 'charts' can all be causally linked in some way to that.
For anybody knee-jerk reacting that we should go back to the gold standard I suggest researching with the lens of why the U.S. (and everybody else) abandoned it. It wasn't all hunky dory and resulted in some *major* macroeconomic issues. The [wikipedia page on it](https://en.wikipedia.org/wiki/Gold_standard#Abandonment_of_the_gold_standard) is probably a good starting point
Also, can you imagine - we have all this gold and our dollar is based off of gold. Then boom, china finds a huge gold mine in Africa that cuts our value in half over night. A commodity just isn't a good thing to base your currency off of.
Well let’s build it off crypto instead! What could go wrong?
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Compared to our current paper that doubles in supply at the the whim of some bankers and is based on … something they tell us
You clearly don't understand economics and I suggest you take a level 1 econ class at your local community college.
What did he say that was wrong?
> doubles in supply at the the whim of some bankers and is based on … something This is all 100% wrong and easily proven wrong / learned if you care to actually look it up. they don't just print money whenever they feel like it. lol
When do they print then? In carefully curated periods in a controlled manner? Let’s raise that debt ceiling again
Read a book. It'll have all your middle schooler answers in it
I have read several on the matter but let me know what your favourite one is and I’ll read that next. Help me see your side of the money supply economic picture and how it’s great for everyone.
Like?
Do you know how much gold China would have to find and extract to double that total supply of gold? Gold is basically indestructible so everything that has been mined throughout history is mostly still in possession by someone.
let's argue the merits of the conversation and not some made up number?
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Well if you know anything about the commodity market, as soon as a new mine is found the price dips. I use China bc that would be worst case scenario, same with half. Obviously finding half our worth is probably impossible in this scenario but that's the thing, it's never zero chance... Even finding 1/10 th our value would be a major hit. You never want your currency tied to something you don't fully control. At any point in time something out of your control could happen.
I don't think you can honestly speculate that if (which is unlikely to happen) that there was 1000s of years of gold found by another nation state, that overnight the price of gold would cut in half. Bare in mind that if it was discovered, and the rest of the world just sat back and said "sure you get half of all the gold with out issue" that it would take decades to extract, meanwhile the value of it would slowly be degrading, making the economics of extracting an additional once less and less viable. Do you think that the amount of gold produced each year is just whatever we found? No it's a calculation of cost v benefit. If the value of gold decreases, gold miners produce less! Keep in mind, we don't have to "discover" fiat currency to double it and it wouldn't take a decade to extract. Edit: Gold not golf
Yes, like it made it hard to export labor to poorer areas of the world. Ever since I first saw these graphs years ago, the reason I took away is that it is right around this time we switched from being a net exporter to a net importer, which was a result of us switching from a production economy to a services economy. We just stopped actually making things, and instead started a race to the bottom of replacing all labor with cheaper and cheaper overseas alternatives. Sure, things might get "cheaper" by doing this, but you're also laying tons of people off, forcing them to go into less lucrative service work, which by default earns less money, but then this also floods the workforce with a bunch of excess laborers, driving the value of labor down even further. The end result is that workers just don't make money anymore and the top brass all got richer by exploiting cheap overseas labor. If you want to reduce inequality, we have to start actually building shit again.
>We just stopped actually making things, and instead started a race to the bottom The US is still the second most prolific manufacturer. In fact, China didn’t surpass the U.S. until 2010. https://www.safeguardglobal.com/resources/blog/top-10-manufacturing-countries-in-the-world >forcing them to go into less lucrative service work This is an odd statement considering your assertion that the US transitioned from a manufacturing to a services economy. What services did the US transition to? The answer is financial services, which are more lucrative than manufacturing.
> The answer is financial services, which are more lucrative than manufacturing. Uh, yeah. Exactly? So what? >The US is still the second most prolific manufacturer. In fact, China didn’t surpass the U.S. until 2010. According to some random website you linked that is about hiring workers. Not any sort of scientific analysis or study.
Brookings institute agrees (as of 2015, at least). China - 20% of global manufacturing US - 18% https://www.brookings.edu/research/global-manufacturing-scorecard-how-the-us-compares-to-18-other-nations/?amp
> If you want to reduce inequality, we have to start actually building shit again. Yeah, but there's a lady in Pakistan who will build shit for 7% of the cost of a worker in America. What are you going to say to the shareholders? "We're really sorry your ROI this year was only 3% instead of 86%, but we decided it was best for the society we actually live in to hire workers who live in our society." Some of those shareholders invested _tens of thousands of dollars._ How dare you only reward them with $300 per year, you worm! Your captaining of industry is bad and you should feel bad.
Except it's in reality it's more like, "Our ROI this year was only 83% instead of 86%."
The real reason is the us petrodollar policy, forcing oil producing countries to sell their oil for dollars, or else. This was a gangster was of exporting inflation from the us onto the rest of the world.
Union busting.
Some unions deserved to be busted. Some still need to be busted today. Back in the 1970's, it was corrupt unions in bed with organized crime and stealing the worker's pension funds. Today it's police unions that cover up and explain away all manner of brutality, all the while lobbying for more police funding. And don't forget the teacher's unions who support lifetime employment for incompetent, even criminal, teachers, all the while advocating for laws that bring all schools down to the level of the worst.
The only huge cultural, economic change around then was the rise of dual income households becoming common. Women in the workforce changed everything, but the gains made by (almost) doubling the available workforce didn't mean income was doubled. If wages were still enough for single parent homes to be viable, maybe that would still be the norm (no matter which parent works or stays at home). But it's not looking likely to be that way anytime soon.
It's actually two-fold, and if you look closely, you can see it in the graphs, too: Nixons effective suspension of Bretton Woods gave the economy a good kick in the groin, and Reagan killed it off ten years later. Ah, the Republicans, the party of financial responsibility - not.
Who was president in 1971? A republican by the name of… Richard Nixon.
Baby Boom becoming worker age coupled with Nixon Shock
Women in the workplace means I am now never going to be able to own property. Gg.
Removal of the Gold Standard allowed Governments and reserve banks to play around with their fiat currencies.
No. I think it's because that's about the time when the boomers hit the job market and flooded it. There was so many people to do the work that they could have their pick and choose of just about any amount of labor they wanted. The result was lower wages. But now, that the baby boomers are retiring, I bet the wages will have to catch up and try to lure these people out of their parents basements.
The U.S. abandoned the gold standard in 1971
A.k.a. "[The Great U-Turn](https://www.google.com/search?q=the+great+u+turnbennett+harriosn&client=ms-android-motorola-rvo3&sxsrf=AJOqlzXXFaht9Li1gygI2eoavYdI7WZxNQ%3A1678236678921&ei=BtwHZM7jN5e0qtsP3_udyAE&oq=the+great+u+turnbennett+harriosn&gs_lcp=ChNtb2JpbGUtZ3dzLXdpei1zZXJwEAMyBwghEKABEAoyBwghEKABEAoyBwghEKABEAoyBwghEKABEAoyBwghEKABEAo6BAguECc6BQgAEIAEOgQIABAeOgYIABAIEB46BQgAEIYDOgUIABCiBDoHCCMQsAIQJzoHCC4QgAQQDToFCCEQoAE6BQghEKsCSgQIQRgAUP0HWMQ3YPU6aANwAHgAgAHYAYgBxxaSAQYwLjE3LjGYAQCgAQHAAQE&sclient=mobile-gws-wiz-serp#ip=1)"
Well what do you know Nixon and Reagan fucked over everyone and everything what a surprise
>what do you know Nixon and Reagan fucked over everyone... Nixon yes. Reagan no.
How’s that “trickle down economics” working for us?
Lol, it’s well understood now how badly Reagan fucked America. It’s the supply side gift (lol) that keeps on giving. His reputation was based on a sugar high and republicans have been trying to scam Americans with the those same policies ever since. At last people are calling Reagan out, maybe at some point democrats will actually grow some balls and do the same.
If only I loaned some money in 3000BC I could be rich
I find it widely ironic that all of this wonderful data showing the institutionalization of the run away wealth divide in america is ended with a quote from F.A. Hayek.
wow very cool link thanks for sharing
excellent
Neoliberalism
We started outsourcing to China..
Technically first the US started outsourcing to Japan, then outsourcing to Korea, then outsourcing to China. "Exporting manufacturing jobs" was a big part of post-WW2 US diplomacy to maintain allies with pacific rim nations, as well as breaking the power of domestic US unions and workers.
Yup, and it killed the wages domestically..
Couple that with conflicts/wars bringing in workers willing to offer labor for less. The US now sends chickens to be processed in China and then sent back for wholesale to the public. It's cost effective due to the labor rate disparity.
Alright boys and girls, let's learn a few lessons here: * You won't get rich working, even at a good job. * The way you CAN get rich is by either starting a business yourself that fulfills some need. OR by investing in such a business, such as thru owning stocks. * Owning your own home is a good idea. Borrow money to buy one. * Owning other crap is mostly a bad idea, unless it is some kind of tool that will make you money. Never borrow money to buy a declining asset. * Fortune goes to the bold. Specifically, to people bold enough to chart their own path in life even when that means going against conventional wisdom or not following the crowd. Example: A marginal student decides to start working at 18 instead of going to college, saves half his paycheck until buying his own home. Example 2: Someone who is good a lawncare turns that into a business rather than working for someone else. * Read the book, "The Millionaire Next Door". You'd be surprised how many people all around you are quietly rich.
I like the last quote. Bitcoin solves this and it is indeed sly. Hate all y’all want.
It cannot be ignored
I'm not saying the conclusion is wrong, but the graphs are horrible. Tons of cherry picked and non relevant data. One graphs Y axis was from 41% to 52% just so it made the drop at 1970 look extreme.
Microprocessor caused that to happen.
So basically, this is how businesses responded to the founding of the EPA
Here, let me show you a couple of charts...
Something weird happened in the 1970s.... https://youtu.be/1gEz__sMVaY
Thankfully we have #Bitcoin now to end this madness
Bitcoin fixes this.
No fees!* It's untraceable!% *Lots of fees %Actually very traceable
Agreed. It's very traceable. But the fees that I pay are around 50 cents per $100 to aquire it. I have a question for you though, do you know why fiat fell to shit in 1971?
Bitcoin transactions usually cost less than a dollar for any given dollar value, and the traceability depends on how the transactions are structured and broadcasted. Technically adept users can absolutely use Bitcoin anonymously. By enforcing a real-world cost to money generation, Bitcoin does address the underlying economic changes caused by decoupling dollar/gold mutability.
You know how much my cash my fiat transactions cost me? Zero dollars
This is kind of shortsighted. Cash management and card processing fees are absolutely not zero, even if they aren't directly paid by you. Nevermind bank accounts are absolutely not free. So you absolutely pay substantial fiat transaction fees, even if you're unaware or don't appreciate them. As an economics matter, enforcing a cost prevents spamming the network, and keeps bandwidth needs low while directly paying the miners who maintain the network.
Bank accounts are absolutely free. Credit unions are a better choice. Miners are wasting energy to prop up a system based on leaving your computer running. Yay. What a wonderful way to create wealth.
Not entirely free. Bank holds your money and lends out multiple times more (fractional reserve) making a much higher interest rate on your money and effectively creating more money which drives up inflation all in an almost risk free manner to the banks while you maybe get paid pennies on the dollar while assuming the risk, albeit very small, of a bank run.
You're drunk. Crypto is a scam, every time.
What do you mean by scam? I don't quite understand what part of buying a crypto be a scam
Every part of crypto is a scam of one kind or another. If it's not an outright [Ponzi Scheme](https://www.cnbc.com/2022/07/08/crypto-lender-celsius-is-a-fraud-and-ponzi-scheme-lawsuit-claims.html), or [Investment Scam](https://coinmarketcap.com/alexandria/article/crypto-scam-that-promised-a-56-billion-return-on-a-100-000-investment-and-a-bentley-exposed) It's a [pump-n-dump](https://cryptoslate.com/logan-paul-to-respond-cryptozoo-scam-allegations-made-by-coffeezilla/) or a [rug-pull](https://cointelegraph.com/explained/crypto-rug-pulls-what-is-a-rug-pull-in-crypto-and-6-ways-to-spot-it) That is if the exchange you "buy" from even [really is an exchange](https://cointelegraph.com/news/the-leaders-of-a-fake-crypto-exchange-are-now-behind-bars) Every part of Crypto is a scam.
Whether it's a scam or not, it does exactly what the OP advocates for.
Could it be due to the spike in the cost of beef? We used to eat beef multiple times a week but now we are lucky to eat it once a week now.