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WTF Happened in 1971?
Posted on 7/24/20 at 8:43 am
Posted on 7/24/20 at 8:43 am
WTF Happened in 1971 is a website full of mostly economic charts illustrating the decline of America since 1971. 1971 is an inflection point in America. In other words the U.S. enjoyed expansive and equitable growth from WW2 until that inflection point in 1971. Here is a sample of the charts at this website:
May I suggest the following for the reasons behind the decline since 1971:
1. Nixon completely decoupled the dollar off of gold. After 1971 the check on printing money in the form of bond purchases by central banks that can make money out of thin air was removed. This created a much higher rate of inflation.
2. In response to higher inflation congress passed appropriation laws to automatically add COLA to annual budgets usually above the CPI. This hysteresis has a compounding effect on inflation where each year congress needs more and more money for appropriations and central banks buy more and more bonds to oblige. This compounding effect can be seen in the charts I posted especially in the U.S. debt chart.
3. Trade. U.S. multinationals moved their manufacturing out of the U.S. to acquire cheaper labor (much cheaper labor) in counties like China with the goal of making cheap goods and selling them back to rich Americans. It worked quite well and many CEO's and shareholders of these companies became very rich. On this point the corporate executives were looking out for their timeline of quarterly profits who captured politicians to make sure they did not look at the decadal timeline to protect Americans.
Anyway, those are my three answers to WTF happened in 1971.
May I suggest the following for the reasons behind the decline since 1971:
1. Nixon completely decoupled the dollar off of gold. After 1971 the check on printing money in the form of bond purchases by central banks that can make money out of thin air was removed. This created a much higher rate of inflation.
2. In response to higher inflation congress passed appropriation laws to automatically add COLA to annual budgets usually above the CPI. This hysteresis has a compounding effect on inflation where each year congress needs more and more money for appropriations and central banks buy more and more bonds to oblige. This compounding effect can be seen in the charts I posted especially in the U.S. debt chart.
3. Trade. U.S. multinationals moved their manufacturing out of the U.S. to acquire cheaper labor (much cheaper labor) in counties like China with the goal of making cheap goods and selling them back to rich Americans. It worked quite well and many CEO's and shareholders of these companies became very rich. On this point the corporate executives were looking out for their timeline of quarterly profits who captured politicians to make sure they did not look at the decadal timeline to protect Americans.
Anyway, those are my three answers to WTF happened in 1971.
10
Posted on 7/24/20 at 8:45 am to GumboPot
International capital flows restrictions were removed.
Posted on 7/24/20 at 8:48 am to Jyrdis
Nixon——gold and China
Posted on 7/24/20 at 8:50 am to GumboPot
End of the Bretton Woods system and a total fiat currency.
Posted on 7/24/20 at 8:56 am to SCLibertarian
quote:
End of the Bretton Woods system and a total fiat currency.
Yep. No check on spending. Money is just a concept now based on the definitions of the people with the biggest guns.
Posted on 7/24/20 at 8:56 am to SCLibertarian
You’d have to explain some of these graphs. In the first one, what exactly is productivity and how is it measured? I’m thinking more efficient machinery has increased productivity. Why would access to use a better machine correlate to my compensation?
Posted on 7/24/20 at 9:01 am to BigB123
quote:
Why would access to use a better machine correlate to my compensation?
Backhoe operators make more the shovel operators cause the man on the backhoe can get more done.
Posted on 7/24/20 at 9:06 am to GumboPot
Ron Paul probably has the answer.
Posted on 7/24/20 at 9:09 am to Animal
quote:
Backhoe operators make more the shovel operators cause the man on the backhoe can get more done.
that's not how it works.
Posted on 7/24/20 at 9:11 am to GumboPot
Globalism finally showed its teeth. The power of labor unions was diminished by the low labor costs, keeping the cost of labor down. The productivity continued to increase with this competition, plus advances in mechanism. We have always known the foreign labor costs would affect wages here in the USA, and they still are. The qulity of foreign labor increased with the rest of the world catching up with us. It was predictable, and everybody knew that day would come, and it has. We are becoming less and less capable of taking advantage of low cost of foreign labor. We are now paying the piper.
Posted on 7/24/20 at 9:17 am to SCLibertarian
quote:
End of the Bretton Woods system and a total fiat currency.
There's a reason that fiat currencies have an average lifespan of under 30 years. They have a not-so-strange tendency to destroy economies.
I mean, what could be worse than a currency backed by a government rather than a physical base? Zero responsibility and complete manipulation without any constraints. It's really effective in shifting all risk onto a populace and destroying individual wealth.
Posted on 7/24/20 at 9:34 am to GumboPot
frick Richard Nixon.
Wasn’t immigration radically changed around that same time too that eventually caused the influx of unskilled labor, much of it illegally?
Wasn’t immigration radically changed around that same time too that eventually caused the influx of unskilled labor, much of it illegally?
Posted on 7/24/20 at 9:59 am to Animal
Technology is making an "operator" obsolete. Earthmoving equipment is now basically run by software loaded with 3D design surfaces interfacing with GPS controls. The contractor just need someone sitting in the seat to start it, stop it and bridge small gaps in the auto-control capability.
As such, I ask the same question; why would a reduced skill set from the rider demand higher pay? The guys that deserve the money are the developers of the software, GPS, controller, etc. and also the contractor who laid out the capital to acquire the self-operating machine.
As such, I ask the same question; why would a reduced skill set from the rider demand higher pay? The guys that deserve the money are the developers of the software, GPS, controller, etc. and also the contractor who laid out the capital to acquire the self-operating machine.
Posted on 7/24/20 at 10:09 am to DamnGood86
Isn't that the year we decided to use as the benchmark or zero year for financial purposes....(?) been a while since I had a finance class.
This post was edited on 7/24/20 at 10:10 am
Posted on 7/24/20 at 10:10 am to GumboPot
quote:
Nixon completely decoupled the dollar off of gold.
Posted on 7/24/20 at 10:12 am to GumboPot
Another factor was the greatly increased LEGAL immigration after the 1965 Hart Cellar Act passed.
Posted on 7/24/20 at 10:14 am to DamnGood86
quote:
Technology is making an "operator" obsolete. Earthmoving equipment is now basically run by software loaded with 3D design surfaces interfacing with GPS controls. The contractor just need someone sitting in the seat to start it, stop it and bridge small gaps in the auto-control capability.
As such, I ask the same question; why would a reduced skill set from the rider demand higher pay? The guys that deserve the money are the developers of the software, GPS, controller, etc. and also the contractor who laid out the capital to acquire the self-operating machine.
Your example only covers one small aspect of WTF Happened in 1971. The primary reason behind inequity expansion is currency debasement and all the financial engineering that followed. Decoupling currency from physical removed the check on monetary policy.
This post was edited on 7/24/20 at 10:15 am
Posted on 7/24/20 at 10:14 am to DamnGood86
quote:
Technology is making an "operator" obsolete. Earthmoving equipment is now basically run by software loaded with 3D design surfaces interfacing with GPS controls. The contractor just need someone sitting in the seat to start it, stop it and bridge small gaps in the auto-control capability. As such, I ask the same question; why would a reduced skill set from the rider demand higher pay? The guys that deserve the money are the developers of the software, GPS, controller, etc. and also the contractor who laid out the capital to acquire the self-operating machine.
The education sector has done a horrible job of predicting what skills people need to be valuable.
People graduating with english, art, and poly sci majors offer very little. Science, math, and physical skills need to be more of a focus. Degrees for these other bullshite tracks need to be shorter and cheaper.
Posted on 7/24/20 at 10:17 am to WaWaWeeWa
quote:
The education sector has done a horrible job of predicting what skills people need to be valuable.
People graduating with english, art, and poly sci majors offer very little. Science, math, and physical skills need to be more of a focus. Degrees for these other bullshite tracks need to be shorter and cheaper.
You have to give LSU props for their main focus on STEM fields. They are probably one of a few universities where most of their graduates are in STEM fields. The only problem for Louisiana these graduates are usually forced to move out of the state.
This post was edited on 7/24/20 at 10:21 am
Posted on 7/24/20 at 10:17 am to GumboPot
quote:
Decoupling currency from physical removed the check on monetary policy.
Indeed. We're witnessing it in real time with the CV "stimulus". They're literally printing TRILLIONS of dollars of debt currency to cover for lost productivity in the economy.
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