Stagflation, Oil Shocks, and Neoliberalism: 1970s-2000s Economic Shifts

Stagflation

Economic phenomenon combining high inflation, high unemployment, stagnant growth — a breakdown of the usual trade-off between inflation and unemployment.

Key Dates of Stagflation

1973-mid-1970s; visible under administrations of Richard Nixon, Gerald Ford, and Jimmy Carter.

Causes of Stagflation

Oil shocks (spiking energy prices), collapse of post-war industrial expansion, increased foreign competition, end of price-controls.

Examples of Stagflation

After 1973 oil embargo, inflation rose more than 18% in one year; unemployment rarely fell below 7%.

Consequences of Stagflation

Real wages stagnated or dropped; industrial decline; weakening of job security and labor; middle-class instability; set stage for corporate restructuring and political shifts.

1970s Oil Shocks

Sudden sharp increases in global oil prices due to geopolitical events (embargoes, supply disruptions), leading to economic crisis in oil-dependent economies.

Key Dates of 1970s Oil Shocks

October 1973 — oil embargo declared by OPEC; 1979 — second major oil-price spike after Iranian Revolution.

Causes of 1970s Oil Shocks

Geopolitical instability in Middle East; attempt by oil-producing nations to assert power amid global energy-dependent economy.

Examples of 1970s Oil Shocks

U.S. factory output fell ~10% in 1974; unemployment nearly doubled; widespread rationing and price hikes, drop in manufacturing output.

Consequences of 1970s Oil Shocks

Triggered inflation and recession; accelerated decline of energy-dependent and manufacturing industries; contributed to broader economic insecurity and social upheaval.

Neoliberalism / Global Capitalism

Economic system emphasizing free markets, deregulation, corporate power, global trade and supply-chains, minimal labor regulation — a shift from welfare-state / regulated capitalism.

Key Dates of Neoliberalism

1980s-1990s (post-Cold War), corporate mergers of 1990s; post-1989 globalization era.

Causes of Neoliberalism

Collapse of USSR/Communism, end of Cold War, global opening of markets, advances in technology & trade, corporate pressure for cheaper labor and higher profits.

Examples of Neoliberalism

In the 1990s, massive corporate mergers (e.g. oil, telecom, finance), deregulation, outsourcing sweat-shop garment labor (1991 Manhattan garment shop example).

Consequences of Neoliberalism

Decline of traditional union jobs; rise of sweatshops and precarious labor; wage stagnation for many; sharp inequality; fragmented working class across race, region, immigrant status; growth in corporate profit and wealth disparity.

Offshoring & Decline of the Rust Belt

Relocation of industrial production and manufacturing from high-cost, unionized U.S. regions (Rust Belt) to lower-cost domestic areas (South) or overseas — leading to deindustrialization.

Key Dates of Offshoring

1970s-1980s for internal relocation; 1990s global outsourcing surge.

Causes of Offshoring

Rising U.S. production costs, global competition, deregulation, corporate drive for profitability, weakened labor protections.

Examples of Offshoring

A Northern California lumber company in 1988 auctioned off its mill equipment as parent firms moved abroad.

Consequences of Offshoring

Collapse of many Rust Belt industrial towns; massive unemployment and urban decay; large-scale loss of unionized jobs; increasing economic insecurity; widening regional inequality; shift of working-class jobs into precarious service and low-wage sectors.

Post-Cold War Global Capitalism

After the end of the Cold War, the U.S. entered a phase of accelerated globalization: trade liberalization, corporate mergers, outsourcing, emergence of a service-based and immigrant workforce, rapid technological change.

Key Dates of Post-Cold War Global Capitalism

1989 (collapse of Soviet bloc), 1990s (mergers, deregulation, globalization), 1997 UPS strike, 1990s-2000s labor changes under AFL-CIO leadership change, SEIU expansion.

Causes of Post-Cold War Global Capitalism

Collapse of communist rival, opening of global markets, advances in technology (computers, Internet), corporate drive for global supply-chains, deregulation.

Examples of Post-Cold War Global Capitalism

1991 garment sweatshop in Manhattan; dramatic corporate merger wave (oil, telecom, finance); rise of immigrant labor in service, manufacturing, and high-tech sectors.

Consequences of Post-Cold War Global Capitalism

Breakdown of stable labor market; massive growth in precarious work; decline in union influence; rising inequality; fragmentation of workforce across race, immigrant status, job stability.

Post-9/11 Economic & Labor Shock

After the 2001 terrorist attacks, structural economic and security changes combined with existing global capitalist trends to create a fragile labor market and deepen inequality.

Key Dates of Post-9/11 Economic Shock

2001 (September 11 attacks), creation of Department of Homeland Security (DHS), expansion of retail/global corporations such as Walmart.

Causes of Post-9/11 Economic Shock

Global capitalism pressures, corporate consolidation, increased security spending and restructuring, outsourcing, decline in stable manufacturing — all converging after a national security crisis.

Examples of Post-9/11 Economic Shock

Rapid expansion of large retail and distribution firms; workforce shifts toward retail, low-wage service jobs, global supply-chain labor.

Consequences of Post-9/11 Economic Shock

Further erosion of stable employment; growth of low-wage, precarious jobs; weakening of labor protections; greater economic and social vulnerability for large numbers of Americans.

What was Occupy Wall Street (OWS)?

A decentralized protest movement that began in September 2011 in New York City, challenging economic inequality and corporate greed.

What powerful frame did OWS popularize?

The '99% vs. 1%' frame, reshaping discourse about inequality.

When did the first march of OWS take place?

September 2011.

What significant event occurred on November 1, 2011?

A major police raid cleared Zuccotti Park.

What were the main causes of the Occupy Wall Street movement?

Aftermath of the 2007-2008 financial crisis, neoliberal deregulation, global austerity, rising debt, and growing cynicism about democracy.

What did the protesters demand on September 18, 2011?

More equitable wealth distribution, banking reform, an end to foreclosures, and debt forgiveness.

What was the impact of the chant 'We Are the 99%'?

It became a defining slogan that reframed national conversations about class and inequality.

How did OWS utilize social media?

It pioneered livestreaming, hashtags, and viral videos to organize and document protests.

What was 'Bank Transfer Day'?

An organized mass withdrawal from big banks into credit unions, pressuring banks to reverse planned fees.

What was the significance of the Zuccotti Park encampment?

It served as a hub for nightly assemblies, political discussions, and community engagement.

What was a major consequence of OWS in terms of language?

The terms 'The 1%' and 'The 99%' entered mainstream political discourse.

How did OWS influence future movements?

It provided tools, ideas, and networks for movements like Fight for $15 and Black Lives Matter.

What was the role of sympathetic labor unions in OWS?

They supported the movement, particularly those involved in the 2010 Wisconsin labor protests.

What were the effects of harsh policing during OWS?

Increased public awareness of police violence and repression against protesters.

What did the anti-eviction actions during OWS highlight?

National attention to housing insecurity and predatory lending practices.

What was the global impact of OWS?

It inspired encampments and protests in 951 cities across 82 countries.

What was the demographic of the 'Occupiers'?

Mostly young activists, workers, and individuals affected by foreclosures and unemployment.

What did OWS reveal about government accountability?

It highlighted the perception that government served the wealthy rather than ordinary Americans.

What was the significance of the 'Occupy Our Homes' initiative?

It moved unhoused families into abandoned houses to protest predatory lending.

What was the outcome of the OWS movement in terms of political responses?

It forced mainstream politicians to address issues of inequality and Wall Street accountability.

What did the OWS movement energize?

A new generation of activists who later joined broader social-justice movements.

What is the American Legislative Exchange Council (ALEC)?

A powerful, corporate-funded consortium of conservative politicians and business leaders that drafts model legislation and coordinates state-level political campaigns.

What significant political event in 2010 influenced ALEC's power?

The Republican victories in the 2010 elections, which allowed ALEC-aligned lawmakers to gain influence.

What major social issues did ALEC target during the 2010s?

Labor rights, women's reproductive freedom, LGBTQ protections, environmental regulations, and local government authority.

What role did the Tea Party movement play in relation to ALEC?

The Tea Party mobilized voters around anti-government and conservative values, facilitating ALEC's model policies' enactment.

What types of organizations funded ALEC?

Big oil companies, tobacco companies, pharmaceutical corporations, Koch family foundations, and Adolph Coors.

What was a key strategy of ALEC in influencing state legislation?

Drafting model bills with step-by-step plans for passing various laws, including right-to-work and anti-abortion restrictions.

What was the impact of ALEC on abortion legislation from 2010 to 2014?

Over 130 new state abortion restrictions were passed, the highest number since Roe v. Wade.

What are right-to-work laws?

Legislation that targets union dues collection and weakens labor unions' power.

What was the effect of ALEC's model legislation on local governments?

It reduced the power of city and county governments in areas such as wage laws and environmental regulations.

What was the consequence of gerrymandering post-2010?

Republicans secured long-term power by redrawing districts and implementing new voting restrictions.

What ideological perspective did ALEC promote?

Neoliberal and anti-union ideology, advocating for free-market solutions and privatization.

What was a significant outcome of ALEC's influence on state politics by 2017?

Republicans controlled 32 state legislatures, allowing ALEC's agenda to sweep across the nation.

How did ALEC's actions affect labor power?

Right-to-work and pre-emption laws severely weakened unions' ability to organize and bargain collectively.

What was the impact of ALEC-supported laws on reproductive rights?

They effectively eliminated abortion access for millions due to travel burdens and clinic closures.

What was the effect of ALEC's strategy on local democracy?

It centralized power in state governments, undermining local wage laws and civil-rights ordinances.

What types of privatization did ALEC promote?

Privatization of schools, the Postal Service, and public services and infrastructure.

What was the global influence of ALEC's strategies?

U.S. right-wing strategies mirrored movements abroad, contributing to a shift toward authoritarian, anti-worker politics.

What was the relationship between ALEC and voter suppression?

ALEC's new laws restricted voting rights for marginalized groups, entrenching Republican political power.

What types of model bills did ALEC draft?

Bills for right-to-work laws, anti-abortion restrictions, environmental deregulation, and privatization proposals.

What was the significance of the 2010 elections for ALEC?

The elections allowed ALEC-aligned lawmakers to gain significant influence in state legislatures.

What was the overall consequence of ALEC's legislative influence?

A transformation of state-level politics, leading to significant policy changes across the nation.

Shelby County v. Holder (2013)

Struck down provision of Voting Rights Act of 1965 requiring states engaged in past discrimination to get federal preclearance before instituting changes in voting laws or practices;

- allowed restrictive state voter ID laws to go forward (Roberts Court)

Citizens United v. FEC (2010)

corporations have a 1st Amendment right to expressly support political candidates for Congress and the White House

Citizens United v. FEC (2010) consequences

gave unlimited amt of $$$ to campaigns

ex: Musk's 277B to Trump 2024

Citizens United v. FEC (2010) gave

corporate personhood

Weapons of Mass Destruction (WMD)

nuclear, biological, and chemical weapons intended to kill or harm on a large scale

WMD claim

Bush claimed Saddam Hussein had WPM

- major reason for the war w/ IRAQ

WMD Result

intelligence found no stockpiles were found, making the "weapons of mass destruction" claim a deeply controversial and ultimately mistaken premise for war

Defense of Marriage Act

moral disapproval of gay marriage

Declares that states are not obligated to recognize any same sex marriages from other states

defined marriage and spouse in heterosexual terms for federal law

removed federal benefits of gay marriage

DOMA enacted

may 1996; Clinton signed

DOMA results

- SCOTUS declared unconstituitional in 2013

- 2015 gay marriage legalized AND MUST be recognized in all states

- Biden adds Respect for Marriage Act to officially repeal it

NAFTA (North American Free Trade Agreement)

(REAGAN) Allows open trade between the US, Mexico, and Canada.

NAFTA implemented in...

1994

NAFTA affects

- made labor in MX (cheaper) more pop

- labor crisis bc ppl lost their jobs

Who hated NAFTA

labor unions!

What was the Great Recession?

A severe global economic downturn from 2007 to 2009 triggered by risky financial practices, banking deregulation, and predatory mortgage lending.

What were the main causes of the Great Recession?

Risky financial practices, banking deregulation, and predatory/subprime mortgage lending.

Which demographic groups were disproportionately harmed by the Great Recession?

African American and Latinx households.

What significant act was repealed in 1998 that contributed to the Great Recession?

The Glass-Steagall Act.

Glass-Steagall Act

established the Federal Deposit Insurance Corporation (FDIC) and included banking reforms, some of which were designed to control speculation

What was the effect of the repeal of the Glass-Steagall Act?

It allowed banks to combine commercial savings accounts with high-risk investments.

What happened in 2007 that marked the beginning of the Great Recession?

The foreclosure crisis accelerated.

What major financial institution collapsed in September 2008?

Lehman Brothers.

What was TARP, and when was it passed?

The Troubled Asset Relief Program, passed in October 2008 to bail out banks and investment houses.

What was the impact of the housing boom fueled by cheap credit?

Massive construction growth and an increase in subprime lending.

What were the foreclosure rates among African American and Latinx homeowners compared to white homeowners?

8% for African American and Latinx homeowners; 4.5% for white homeowners.

What was a significant consequence of the Great Recession on employment?

Over 1 million jobs were lost from April to August 2008.

How did the Great Recession affect racial and class inequalities?

It widened inequalities, with significant wealth loss for Black and Latinx families.

What political movement emerged after the Great Recession?

The Tea Party movement.