History v. Now: The Transition Years 1970 – 1990
President’s Nixon, Ford and Carter had the displeasure of overseeing one of the most disruptive decades in our country’s history, the 1970’s. During that time, European, Japanese, Taiwanese and Korean imports began to change the competitive landscape in the US. The oil producing countries of the world began to take their energy assets back from western control. Iran fell to Muslim extremists. The US economy went through two major recessions and entered a third that ended in the early 1980’s under Reagan with double-digit inflation and mortgage interest rates above 20%. Huge companies, like International Harvester, disappeared. Others like Chrysler and ITT were crippled beyond repair.
While European, Japanese, Taiwanese and Korean workers were not as inexpensive as those that would come onto the scene in the next decades, they pushed hard on the value of American workers. Wage rates were challenged. The Democrats and unions had written into law nearly everything they had fought for in the 40’s and 50’s, significantly reducing their value to their members. Technology began to eliminate jobs in large numbers. Containerization, for example, reduced international shipping costs which had isolated the US, and cost many highly paid longshoremen their jobs. Unions struggled, and this decade was the beginning of the end for them.
The remnants of the 1960’s carried over into the 1970’s but had died down by 1980. The Vietnam War was ended. Military spending dropped. Political focus during these decades was on badly needed environmental protection and clean-up, which raised costs on governments and businesses as foreign competitors increased US market penetration without those impediments at home.
Under Reagan and Bush, things stabilized naturally in a new economic reality. US businesses are flexible and responsive. Once the chaff was cleaned out, the stronger survivors grew the economy and began to look outside the US for opportunities. Meanwhile, the Baby Boom generation was 20 years older, well into their family raising years, with a more pragmatic, less revolutionary outlook on life.
Did we just go through another tumultuous transitional decade similar to the 1970’s? Are we due for another set of growth decades in a new economy, like we saw in the 1980’s and 1990’s? More tomorrow.