Economic Crisis of the 1970s
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How did the economic crisis in the 1970s affect western politics and society?
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Solution Summary
The solution describes the economic crisis of the 1970's in the United States. It lists the factors that contributed to it and the events that unfolded in that period.
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How did the economic crisis in the 1970s affect western politics and society?
The United States has faced two major economic downfalls in the last century - the Great Depression of 1929 and the Economic Crisis of the 1970's which has been frequently referred to as neoliberal capitalism. The great depression had put in place a large framework of government run programs and powerful unions. The economic crises of the 1970's ended these principles and brought about a diminished role of government and a weaker union framework. Here are some of the effects the 1970's economic crises had on western politics and society.
?The US economy from the late 1940's up until the 1970's was at the top level of its performance. "From the late 1940s to the early 1970s, the U.S. economy grew at an average annual rate of nearly 4%" (Reuss, 2011). Both unemployment and inflation rates remained low most of the time.
?As an economic power that had yet to be threatened, the demise of the economy in the 1970's left the west with challenges from all fronts. Among these were "rising international competition, spiking energy prices, declining productivity and profitability, and soaring inflation and unemployment" (Reuss, 2011)
?Trade deficits rose which in turn led to the weakening of the US dollar since confidence fell. Waning international confidence in the dollar led to the exhaustion of U.S. government gold reserves, as international holders of dollars demanded redemption of their dollars for gold.
?The price of oil per barrel ...
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