Notes on the Transition from the 'Great Society' to 'Stagflation Nation'

From 'Great Society' to 'Stagflation Nation'

Introduction

• The era of the "Great Society" transitioned into a period known as "Stagflation Nation" in the 1970s.
• This period saw new kinds of economic growth alongside challenges like deindustrialization, as exemplified by the decline of U.S. Steel in Youngstown, Ohio.

Social and Political Movements

• Black Power Movement: Focused on African American empowerment and self-determination.
• Black Panther Party:
  • Implemented community programs like free breakfast for children.
  • Figures like King and Carmichael were prominent in the movement.
• Modern Feminist Politics:
  • Advocated for women's rights and equality.
  • Key issues included equal pay, reproductive rights, and challenging traditional gender roles.
  • Organizations like the National Organization for Women (NOW) pushed for legislative changes and social reforms.
  • The phrase "We Can Do It!" became an iconic symbol of women's empowerment.
• Ms. Magazine:
  • Founded in 1972 by Gloria Steinem, it became a leading voice for feminist issues.
  • Featured articles on a wide range of topics, including women's health, politics, and culture.
  • Notable figures like Alice Walker contributed to the magazine.
• Farmworker Movement:
  • The United Farm Workers (UFW), led by Cesar Chavez, fought for the rights of agricultural workers.
  • Boycotts, like the one against California grapes, were used to pressure growers to improve working conditions.
• Native American Activism:
  • Sought to reclaim treaty rights and assert sovereignty.
  • Advocated for self-determination and cultural preservation.
• Chicano Movement:
  • Also known as El Movimiento, it championed the rights of Mexican Americans.
  • Focused on issues such as immigration reform, education, and political representation.
  • The slogan "Viva la Raza" celebrated Chicano identity and culture.
• Asian American Activism:
  • Addressed issues such as discrimination, immigration, and war.
  • Opposed the Vietnam War and supported movements for social justice.
• Gay Rights Movement:
  • Challenged discrimination and prejudice against LGBTQ individuals.
  • Organizations like the Mattachine Society and Daughters of Bilitis were early pioneers.
  • The Stonewall Riots in 1969 marked a turning point in the fight for LGBTQ rights.
  • Key figures like Harvey Milk emerged as leaders in the movement.
  • Dr. Annette Washburne's discriminatory views at the University of Wisconsin reflected the prevailing attitudes of the time.
  • Executive Order 10450 (1952) and the "Lavender Scare" led to the purging of LGBTQ individuals from government and university positions.
  • In 1974, the American Psychiatric Association removed "homosexuality" from its list of mental disorders.
  • By the mid-1970s, some progress was made, with the end of the ban on federal employment for LGBTQ people.

Economic Shifts: Stagflation and Deindustrialization

• Stagflation: A combination of slow economic growth, high unemployment, and high inflation.
• Deindustrialization: The decline of manufacturing industries in the United States.
  • The closure of steel plants in Youngstown, Ohio, between 1977 and 1979 resulted in over 8,000 workers losing high-wage jobs.
  • The Youngstown Sheet and Tube Co. closure led to early retirement for 35% of displaced workers, unemployment or relocation for 25%, and low-paying retail jobs for the remaining 40%.
  • The average weekly wage for Youngstown steelworkers in 1977 was $343, while for employees in other industries it was$136.
  • U.S. Steel plant closings nationwide eliminated another 13,000 jobs.
• Steel Production Decline:
  • Shift in global steel production:
    • US production: 92 million tons in 1948 to 133 million tons in 1977.
    • Japan production: 4 million tons in 1948 to 120 million tons in 1977.
    • France, Germany, and Britain production: 54 million tons in 1948 to 152 million tons in 1977.
  • Approximately 35 million U.S. jobs were lost in the 1970s due to disinvestment and automation.
• Corporate Investment Strategies:
  • U.S. Steel reduced capital expenditures in steel making by a fifth and invested profits in chemical firms and shopping malls.
  • By 1980, half of U.S. Steel’s capital investment was in non-steel sectors.
  • Mobil Oil bought the Montgomery Ward department store chain in 1979.
  • U.S. corporations spent approximately $40 billion on acquiring other companies in 1979 alone.</li></ul></li> <li><strong>American Can Co.:</strong><ul> <li>Transformed into Primerica, a financial services company.</li></ul></li> </ul> <h4 id="foreigninvestmentandmultinationalcorporations">Foreign Investment and Multinational Corporations</h4> <ul> <li><strong>Increased Foreign Investment:</strong><ul> <li>Direct foreign investment by U.S. companies increased 16 times between 1950 and 1980, from$12 billion to $$192 billion.
  • GE expanded its worldwide payroll by 5,000 employees but eliminated 25,000 domestic jobs while creating 30,000 foreign jobs during the 1970s.
  • RCA cut U.S. employment by 14,000 and increased its foreign workforce by 19,000.
  • GM and Ford invested heavily abroad; by 1980, Ford invested up to 40% of its capital budget overseas.
• Overseas Profits: By the end of the 1970s, overseas profits accounted for 1/3 or more of the profits earned by the nation’s largest multinational corporations.
  • Examples of overseas profit contributions:
    • Ford Motor Co. = 94%
    • Coca-Cola = 65%
    • Citicorp = 83%

Economic Concentration

• Decline of Independent Businesses:
  • 1900: 8 million independent businesses.
  • 1990s: 14 million (although the labor force had tripled).
  • The proportion of self-employed workers fell from approximately 30% in 1900 to about 9% by the century’s end.

Shift in Employment Sectors (in thousands)

Regional Economic Changes

• Decline in Traditional Manufacturing:
  • In Fall River and Waltham, Massachusetts, employment in plants making women’s clothing dropped from 80,000 to 36,000 between 1960 and 1975.
• Growth in High-Tech and Service Sectors:
  • Growth in high-tech industries (e.g., Wang, Digital) added 50,000 jobs between 1976 and 1978.
  • Department store jobs doubled between 1959 and 1976.
  • Growth in hotels, motels, banking services, and insurance.

End of an Era

• Economic Downturn:
  • GNP growth declined from 4% between 1960 and 1973 to 1.8% between 1973 and 1982.
  • The unemployment rate increased from 4.8% in 1973 to 8.3% in 1975.
  • Double-digit inflation, averaging 8.8% for the decade.
• Oil Shock: Rapid increase in oil prices leading to gas lines.
• Decline in Real Wages:
  • Average worker’s after-tax pay declined for the first time since the 1940s.
  • In 1979, it was 6% below its 1972 level.
• Erosion of U.S. Dominance:
  • The U.S.’s dominant position in world trade, output, and other indicators was undermined.
  • Highest GDP per capita in 1950, 1960, and 1970; by 1980, it ranked 11th.

Political Response

• Ronald Reagan's association with General Electric and his message of making America great again resonate with a population experiencing economic challenges.