17 C: Stagflation and the Rise of Reagan

This flashcard set covers the vocabulary and key concepts from early 1970s economic history, focusing on stagflation, the rise of neoliberalism, and major policy shifts under Nixon, Ford, Carter, and Reagan.

Stagflation

A condition of economic turmoil characterized by a combination of economic stagnation (or recession) and inflation.

Neoliberalism

Policies and ideas associated with market regulation of social life since the $1970s$, characterized by hostility to socialism, trade unions, and social welfare programs that are seen as interfering with the market.

The Volcker Shock

A major policy shift in $1979$ where Fed Chair Paul Volcker raised interest rates to historically high levels to halt inflation, consolidating the neoliberal era.

Keynesian economics

The dominant economic management strategy prior to the $1970s$ that was displaced by neoliberal policies following the period of stagflation.

Supply Shocks

Sudden disruptions such as the $1973$ OPEC oil export suspension and bad harvests that led to skyrocketing fuel and food prices.

OPEC / OAPEC

The Organization of Petroleum Exporting Countries and the Organization of Arab Petroleum Exporting Countries, which suspended oil exports to the U.S. following the $1973$ Israeli war with Syria and Egypt.

The Misery Index

An economic measurement calculated by adding the rate of inflation to the rate of unemployment.

Gradualism

An economic solution promoted by Milton Friedman that supports inducing a recession to halt inflation through marketization and privatization.

Wage and Price Controls

Economic management tools used by President Nixon prior to the $1972$ election to regulate the economy.

The "old-time religion"

A policy approach adopted by Nixon and Ford post-$1972$ involving high interest rates and fiscal austerity combined with cuts to the welfare state.

Humphrey-Hawkins Act of 1978

Legislation won by Coretta Scott King and the Full Employment Action Council which aimed to expand the welfare state and increase economic regulation to create meaningful jobs.

Social Citizenship

A concept described by Cybelle Fox referring to the redrawn boundaries of who has a right to social assistance during the Nixon era's crackdown on the welfare state.

CETA

The Comprehensive Employment and Training Act, which disbursed approximately $11$ billion annually and was criticized by Treasury Secretary William Simon for financing patronage and 'counterculture' programs.

Austerity

A policy response to inflation involving government spending cuts and restrictions on welfare state provision, often justified by the belief that government spending caused inflation.

October War / Yom Kippur War

The $1973$ conflict between Israel, Syria, and Egypt that provoked the oil embargo against the United States.