10 ms·
WTF Happened in 1971? (2019)
- aurareturn 2y agoStaggering charts.
- willytobler 2y agothe end of bretton woods and the gold standard. Instead of Gold the the US could pay other countries with self printed paper.
- giancarlostoro 2y agoHow do we even go back to a gold standard correctly? I've heard it said that it would potentially ruin the economy, so how would one even do it? Do you just start printing bigger denomination bills as silver / gold certificates? I still have a "Silver Certificate" $5 bill somewhere...
- rbanffy 2y agoThose who don't like something always say it'll ruin the economy. They probably did that with the 5-day week, the 40-hour week, vacations, parental leave, overtime pay, etc. It never quite happens.
- aredox 2y agoThe gold standard era was full of crises
- throw0101c 2y ago> The gold standard era was full of crises E.g., * http://archive.is/https://www.theatlantic.com/business/archive/2012/08/why-the-gold-standard-is-the-worlds-worst-economic-idea-in-2-charts/261552/ http://archive.is/https://www.theatlantic.com/business/archi...
- Aunche 2y agoAmerica is still on the gold standard in that you can theoretically exchange an American Gold Eagle worth $2800 for $50 at a bank. What the end of the Bretton Woods is really means is that the government is unwilling to sell you an oz of gold for $50 anymore. A law that mandates the government to shoot itself in the foot is a bad law. It's not countries can't otherwise be fiscally conservative. Germany's debt to GDP ratio is about the same as it was 20 years ago.
- rbanffy 2y ago> What the end of the Bretton Woods is really means is that the government is unwilling to sell you an oz of gold for $50 anymore Was there a law forcing the government to make gold coins? What it meant is that I would be able to give $2800 to the Fed and get the equivalent amount of gold at a valuation given by the number of dollars in circulation, divided by how much gold the Fed held. > Germany's debt to GDP ratio is about the same as it was 20 years ago. They also don't spend massively on their military.
- wesapien 2y agoNo, but there's a good reason they did this. The US would have run out of gold if they kept the gold standard. Due to the trade deficit, all the exporters would eventually drain the gold supply since gold is seen as better and the thing to be hoarded.
- Zak 2y agoThe mechanics of it are pretty simple: Congress passes a law setting an exchange rate or causing the treasury to do so, then the treasury starts exchanging dollars for gold at that rate. I'll leave whether that's a good idea to people who actually study economics seriously; most of them seem to think it's not.
- aredox 2y agoMore than that, the first oil crisis gave the ruling class the go to break the postwar consensus and start dismantling the social contract
- _fizz_buzz_ 2y agoYeah, that makes a lot more sense than the end of the gold standard. Brenton Woods was hardly a real gold standard anyway. The real gold standard was abandoned in the 30s (for good reasons). A lot of these charts also actually do seem to diverge at '73 rather than at '71.
- aredox 2y agoThe rebuttal says most economist (and charts, when you get enough resolution) place the break around 1978-1980
- _fizz_buzz_ 2y agoI can see that. I think it is difficult to actually pin down to an actual year. But definitely a bit after 1971.
- AnimalMuppet 2y agoHow did the oil crisis give them "the go" to start dismantling the social contract? I don't see the connection at all. Unless you mean "a random unrelated thing that they could use as an excuse"? If that's the case, then it's just an excuse, not a reason.
- aredox 2y agoYou see a constant growth, and then a plateau, and then divergence. But yeah, a reason, an excuse, I meant the same.
- selecsosi 2y agoIt is fair to argue that the oil crisis acted as a catalyst rather than a root cause for dismantling elements of the social contract. The crisis illustrated vulnerabilities in the postwar economic order, provided a convenient pretext for shifting economic policies, and exposed a population that, for various reasons, was less unified and mobilized than in earlier decades. While the ruling class had long-standing interests in undermining their “extracted duties” under the social contract, the oil crisis gave them a plausible narrative and a set of conditions that made such changes appear more justifiable and less resistible shifting the narrative from away from collective welfare solutions and toward individual responsibility and market-driven approaches. I kind of view it as the oil crisis serving as a stress test that revealed the fraying unity and decreasing mobilization capacity of the general populace which occurred alongside broader cultural and political shifts in the 1970s that coincided with a decline in trust in institutions (partly due to events like the Vietnam War and Watergate).
- stonesthrowaway 2y agoAlso, the rise of zionism in america. And the opening of ties with china ( 1971 was when china joined the security council ). The early seventies seems to have been a major inflection point in history. 50 years later, maybe it's time for another? Edit: I wonder which part of my comment is responsible for the downvotes?
- Aunche 2y agoThe only people asking for the return of a gold standard are those who are hoarding large quantities of gold. Ironically, the only reason they were allowed to hoard this large quantity of gold was due to the end of Bretton Woods which also ended the government's incentive to control the price of gold.
- acatton 2y agoRelated: https://www.tylervigen.com/spurious-correlations https://www.tylervigen.com/spurious-correlations
- constantcrying 2y agoSeems totally unrelated.
- the_mitsuhiko 2y agoThere are plenty of graphs on there that have nothing to do with the Bretton Woods Standard's end. Divorce rates are a good example which are a much more likely result of no-fault divorces becoming a thing in the US in 1970.
- allemagne 2y agoThat "Show GenAI's made-up explanation" option is one of the best application of LLMs since the hype train started chugging
- qrsjutsu 2y ago> Reminder: This paper is AI-generated. Not real! Well, time to extend the definition of what is real and what is not. Where's all the schizos at? It's time ... your evolutionary purpose has been revealed.
- csallen 2y agoCould someone replicate this feat by creating a "WTF Happened in 19XX" website for any year in the 20th century, then combing through thousands of charts and graphs, and picking only the ones where there was a change in 19XX? Or was 1971 truly a special year?
- NoboruWataya 2y agoIt was special in some respects, namely it marked the end of the gold standard in the US, which likely had an impact on many of the charts on the website. Undoubtedly other things happened during the 70s which also impacted on those charts but the quote at the end demonstrates that the gold standard is clearly what the website is trying to bring attention to. But I think you are also likely correct that one could create a similar website about, if not any year, certainly many different years. I think this website is being rather disingenuous in the way it presents things. Not only in the way they cherry picked a bunch of charts which show drastic changes after 1971 (and which may or may not be related), but also in the way they leave it to the reader to "do their own research" while framing the question so as to ensure that 5 minutes of googling will yield the answer they want to plant in the reader's mind.
- constantcrying 2y agoWhat is definitely true that there are many, significant indicators which see similar behavior. The website mainly lists economic factors, but if you look at obesity rates you see a similar trend in the 70s, where quite suddenly obesity rates start rising. https://www.mdpi.com/1660-4601/21/1/73 https://www.mdpi.com/1660-4601/21/1/73 I think that while there might not be a single common cause, it would be naive to deny that there could be a combination of events, which mark that time period in particular.
- LawrenceKerr 2y agoI mean, the whole point of the site is to highlight what the Nixon shock left in its wake since 1971. It truly was special in that regard. I'd highly recommend reading the book "Broken Money" by Lyn Alden for understanding the dynamics of what played out.
- 8biteye 2y agoI mean, the early 70's saw some incredibly pivotal policy changes. The US ended its trade embargo with China. The US dollar flooded European markets. The Vietnam War. The 26th amendment to the US constitution was passed, lowering the voting age. Women really entering the workforce. Also, president Nixon announced that the US will no longer convert dollars to gold at a fixed value, and with this, froze wages, prices, and rents for 90 days. Many things can point to this crucial economic change that all culminated around 1971.
- esotericimpl 2y agoAmazing that it all actually accelerates in the early 80s with Reagan who kicks it into overdrive with the collapse of unions. But yeah, it was the "gold standard" and not the collapse of the labor movement, there's nothing stopping us from taking back the value of labor except it comes out of the pockets of our oligarchs.
- tw04 2y agoYou're missing one of the single greatest factors which is that shortly after that time, executive compensation became wholly disconnected from worker compensation. If executive compensation were tied to average employee compensation, I think you'd find a course correction in short order. https://en.wikipedia.org/wiki/Executive_compensation_in_the_United_States https://en.wikipedia.org/wiki/Executive_compensation_in_the_...
- lotsofpulp 2y agoHow would that work practically if executives are getting paid in equity at various points in time? All the employees get options and RSUs too when the executives get them?
- jimbokun 2y agoSounds good to me.
- egypturnash 2y agoSounds fucking awesome to me.
- tw04 2y agoYes? Employees should have a vested interest in the financial success of their company, and an ownership stake. That's how it used to be "in the good old days" when folks had both pensions and stock tying them to the long-term success of the business. That worked quite well prior to robber barons looting and pillaging, declaring bankruptcy, and screwing the workers out of their pensions.
- NoMoreNicksLeft 2y ago>Employees should have a vested interest in the financial success of their company, and an ownership stake. How do you engineer this, do you think? If every burgerflipper at Wendy's owned stock, the performance of that stock isn't connected to performance of their job at all. They can fuck off completely, and the stock either rises or falls. Even if we tie it not to traded stock, but some sort of profit-sharing of that one franchise, there are 40 or 50 workers, minimum, all of whom have been trained to coast along and hope someone else has to do the real work. One could hope they (and the other workers) would learn that their contribution is essential before it goes out of business, but that's absurdly unrealistic. >That's how it used to be "in the good old days" when folks had both pensions and stock tying them to the long-term success of the business. It was never that way for any significant fraction of the workforce. Sure, if you worked for one of the Fortune 100 companies, already wildly successful. But anyone struggling at their city's papermill or textile mill or whatever, there wasn't stock and pensions. And at the biggest companies, unions managed to wedge their foot in the door to the point that you had UAW workers and the like quitting the week after lunch on Tuesday because they'd made quota. It was good for them, personally, of course, but to the long term detriment of the very businesses that employed them. They too, despite their stock and pensions and vested interest int he financial success of their companies and ownership stakes, just sort of coasted along and let it all fall apart. The grunts, it turns out, are rarely all that interested in their own vesting.
- ihm 2y agoIn summary: the capitalist class won the class war.
- DesiLurker 2y agoCapital class won and then convinced labor class that capital is more important for functioning economy even though you could create capital out of thin air in fiat era. then went on to divide, restrict and conquer labor. to me that about sums it up.
- VHRanger 2y agoAlso note this rebuttal: https://singlelunch.com/2023/09/13/the-bad-economics-of-wtfhappenedin1971/ https://singlelunch.com/2023/09/13/the-bad-economics-of-wtfh... With related discussion here: https://news.ycombinator.com/item?id=39144867 https://news.ycombinator.com/item?id=39144867
- keybored 2y agoWebsites that want to push a narrative should spell out their narrative (the WTF one). This website cannot have been up for this long without having a narrative.
- khaki54 2y agoI think it's clear they aren't really sure; putting up a bunch of quasi related charts points to a desire to facilitate a discussion.
- bryanlarsen 2y agoThey are very sure. There are lots of different things that happened in the late 60s and early 70s through to the early 80s that substantially affected the economy. Focussing on 1971 makes it clear that they think only one of those is significant. It's much more effective to let a reader make their own conclusion from cherry-picked data than it is to state the conclusion outright.
- ginko 2y ago> Focussing on 1971 makes it clear that they think only one of those is significant. Yeah it's clear the authors are talking about the War on Drugs.
- jcranmer 2y agoThe site is titled as a question specifically asking about a particular year. If you have rudimentary financial history knowledge, then you would be aware that 1971 was the year Nixon took the US off of the gold standard. At the same time, if you have rudimentary economic history knowledge, then you would be aware that 1973 was the Arab Oil Embargo, and that the 1970s were an era of economic stagnation and inflation whose principal cause was that economic event. If you reevaluate many of these graphs knowing that the 1970s were a period of high inflation, and that there was a significant economic event in 1973, you end up finding that 1971 wasn't actually all that special: indeed, most of the time, when 1971 looks to be a key inflation point, it's because the graph isn't indexed for inflation and so the beginning of high inflation being around 1971 stands out. Where the graphs are indexed for inflation, there's no obvious inflection point around 1971, instead the inflection point shifts a lot more towards 1980. Putting that together, the only reason you have to make an argument for a monocausal economic event that happens in 1971 is if you want to emphasize the importance of the gold standard, and the only reason you'd have to believe it is if you don't have the economic literacy to understand why the evidence just isn't there at all. Put that together, and the reasonable assumption is that the people who made these charts are goldbugs who want to convince you that we need to return to the gold standard.
- qrsjutsu 2y agohttps://www.computerhistory.org/timeline/1970/ https://www.computerhistory.org/timeline/1970/ The hippies made a choice in the 60s and humanity stuck with it. Resistance is futile.
- opentokix 2y agohttps://www.investopedia.com/articles/mutualfund/05/mfhistory.asp https://www.investopedia.com/articles/mutualfund/05/mfhistor... index funds
- b450 2y agoGiven the scale and variety of transformations in the 20th century - technological revolution, mass urbanization, the integration of billions of new workers into global markets, nuclear weapons, mass media, environmental change, and unprecedented population growth – it would be very surprising if all the graphs just maintained linear trends the whole time. Many of these graphs appear to show continuations - though perhaps at inflection points of exponential growth – of trends already taking place.
- ks2048 2y agoI would like a study that presents all this graphs (separately) to people and have them choose the inflection point. They would not all be on 1971. Some are very clearly a different year or just a gradual change. The adding of arrows biases people to say everything happened in 1971 exactly. I think there was a shift in national priorities and attitudes - roughly late 60s to early 80s. But, this bias is tricking people into thinking that one particular event was the cause of this shift.
- uoaei 2y agoThese graphs depict indicators with varying lead and lag, so of course you'd get a spread. Doesn't mean they don't share a root cause or set of causes.
- mannykannot 2y agoIn the last paragraph, the author of the post you are replying to is saying something entirely consistent with what you are saying here. The title of the article, on the other hand, is suggesting something less nuanced, and ks2048's main point seems to be that putting arrows on the charts at 1971 does nothing to support the view that a singular tipping point occurred in that year.
- uoaei 2y agoAh, but it does, if you just understand a single thing about economic indicators. Context matters. We could rehash every minor news story into a longform essay or we could use what we already know to interpret what's being presented here.
- ks2048 2y agoI agree, but the goal of the site (the title and the arrows) is to bias you AGAINST a "set of causes" and towards one particular event in a particular year.
- dmor 2y agoEnd of the gold standard in the US
- vondur 2y agoHey, I was born in 1971!
- em3rgent0rdr 2y agoFirst affordable commercial single-chip microprocessor?
- PaulHoule 2y agoHunter S. Thompson went to a conference in the oil industry around this time where people were panicking that the US was about to experience an "oil peak" but was told by his editor to sit on the story. Note the global monetary system was completely reorganized, not least to enable large scale exports of oil from peripheral countries to the core: https://history.state.gov/milestones/1969-1976/nixon-shock https://history.state.gov/milestones/1969-1976/nixon-shock
- JumpCrisscross 2y ago> the global monetary system was completely reorganized, not least to enable large scale exports of oil from peripheral countries to the core Your source doesn't mention oil once, except when it links to an article about the 1973 Oil Embargo. Bretton-Woods wasn't ended out of some grand strategy surrounding oil, it was ended because we didn't have enough gold to cover our dollars. Instead of playing the periodic-devaluation game, the monetary equivalent of a debt ceiling, we ended the farce and admitted it was fiat.
- PaulHoule 2y agoThere were not enough gold backed dollars to support greatly expanded trade. Increased trade in oil was the straw that broke the camel's back in my opinion.
- bryanlarsen 2y agoMy favorite theory for the leading cause of the inflection in the early 1970's is energy prices. For the 100 years prior, the price of energy dropped very dramatically every year, Moore's law like. Then we had the oil crisis of 1973 and the price of energy has been roughly flat since. Energy is a huge component of the price of everything, directly and indirectly.
- tedunangst 2y agoThe NHTSA issued FMVSS 215, the 5 mph bumper regulation.
- vondur 2y agoEconomically the US left the gold standard which meant currency could be created by the central bank. This caused inflation to rise but also meant that more capital could be raised in the economy, which wasn't as easy to do when the amount of dollars were fixed. Double edged sword kind of thing.
- thehumanmeat 2y agoThe US left the gold standard well before 1971. Central banks do not create currency, they create bank reserves. There is no indication that it drives money creation. Let me know where I can spend bank reserves to buy goods and services. Money is created from banks, and mostly done so off-shore away from the purview of the central bank. https://en.wikipedia.org/wiki/Eurodollar https://en.wikipedia.org/wiki/Eurodollar
- choxi 2y agoWhat do you mean? I thought the US dollar was fixed to gold between WWII and 1971: > On 15 August 1971, the United States ended the convertibility of the US dollar to gold, effectively bringing the Bretton Woods system to an end and rendering the dollar a fiat currency https://en.wikipedia.org/wiki/Bretton_Woods_system https://en.wikipedia.org/wiki/Bretton_Woods_system
- JumpCrisscross 2y ago> thought the US dollar was fixed to gold between WWII and 1971 The dollar was convertible into gold at a fixed rate. We still printed more dollars than there was gold.
- blased 2y agoThe gold standard disincentivizes consumption, and incentivizes savings. Plain and simple. Of course corporations love consumerism, and that's what the central bank fiat regime has enabled: wanton consumption and dwindling away the wealth of society. If you're wondering why everything in society outside of technology is getting worse and being replaced with cheap substitutes, you need to look at the money itself.
- nooneiswatching 2y agoThis is why we have Bitcoin.
- tradertef 2y agoThis is why we had Gold and this is why we now have Bitcoin.
- cannabis_sam 2y agoThat’s easy to answer, The Powell memorandum. https://en.m.wikipedia.org/wiki/Lewis_F._Powell_Jr.#Powell_Memorandum,_1971 https://en.m.wikipedia.org/wiki/Lewis_F._Powell_Jr.#Powell_M... There’s a clear through line from what that cruel, despicable man put to paper that year, to the incoming presidential administration in 2025.
- mikey_p 2y agoI'm really surprised more people don't know about the Powell memo, considering it literally describes the headlines we're seeing in the news now, attacks against higher education as 'liberal indoctrination' are all over the place, see what Chris Rufo is doing, and the reaction to the protests against the war in Gaza. Or look at book bans, or whatever. The 2010 Citizens United decision cited a case with precedence that Powell wrote the majority opinion on (First National Bank of Boston v. Bellotti).
- conception 2y agoToo far down. That’s when business owners realize they couldn’t win votes for “hey vote for what the rich guy wants!” And switched tactics. And it worked really well.
- taylodl 2y agoIt's called the Nixon Shock - https://en.wikipedia.org/wiki/Nixon_shock https://en.wikipedia.org/wiki/Nixon_shock It ultimately led to the abolishment of the Bretton Woods International Monetary System which in turn led to the Oil Shock of 1973-1974 which in turn led to a prolonged period of high inflation in the United States (Americans from the late 70s would have loved Biden's inflation!) Ronald Reagan "solved" the problem via massive tax breaks that resulted in profligate deficits, deficits which have continued nearly every year since to this day and via moving American manufacturing overseas. It's unfortunate because Federal Reserve Chairman Paul Volcker had done and amazing job in reducing US inflation from 14% (!) in 1980 to 3% in 1983. The nascent neocons essentially pushed him out as Chairman and the rest, as they say, is history. Anyway, what people are going to be asking 50 years from now is WTF happened in 2025? I'm fully expecting there's going to be a Trump Shock that has even longer-lasting impacts.
- JumpCrisscross 2y ago> which in turn led to the Oil Shock of 1973-1974 The Nixon Shock caused the Yom Kippur War that sparked OPEC's embargo of America [1]? [1] https://en.wikipedia.org/wiki/1973_oil_crisis https://en.wikipedia.org/wiki/1973_oil_crisis
- taylodl 2y ago> The Nixon Shock caused the Yom Kippur War that sparked OPEC's embargo of America [1]? Absolutely. The Yom Kippur war was the straw that broke the camel's back, but the Nixon Shock was the force supplying the tension. The Nixon Shock sent the value of the US dollar in significant decline (high inflation), which was the currency being used to buy OPEC oil. From OPEC's perspective they were facing declining revenues due to dollar inflation and were suspicious the Western nations were manipulating the global economy to their advantage. The Yom Kippur war brought everything to a head since it was those same Western nations who were supporting Israel. OPEC decided they'd had enough.
- JumpCrisscross 2y ago> the Nixon Shock was the force supplying the tension More than the aftermath of the 1967 Six-Day War? > From OPEC's perspective they were facing declining revenues due to dollar inflation The real price of oil declined from 1948 until July 1973 [1]. You'd be hard pressed to find the Nixon shock on the international price of oil; it monotonically declined from January 2021 until July 1973. Bretton Woods ended on 15 August 1971; on 17 October 1973 OPEC embargoed the U.S. > OPEC decided they'd had enough OPEC cut production in 1973 and raised prices on everyone. They kept pricing their oil in dollars and selling it for dollars because this wasn't a dispute about dollars or Bretton Woods, it was a dispute over Israel between King Faisal and Nixon. [1] https://www.macrotrends.net/1369/crude-oil-price-history-chart https://www.macrotrends.net/1369/crude-oil-price-history-cha...
- krona 2y agoIf you search for images of "moore's law history", the y-intercept of the vast majority of the charts is 1969-1971. Could the microprocessor explain, in part, the divergence of productivity and wages?
- alexpc201 2y agoI believe it is the most plausible explanation. Microcomponent electronics and later microprocessors made workers more productive.
- IncreasePosts 2y agoIf productivity increases are driven by capital investments, why should the workers capture any of those benefits? For example, if I have a guy digging holes with a shovel, but then I buy a backhoe with an auger, he is now maybe 100x more productive than he was before, but should he get paid more because of that? His life is actually easier now, maybe he should get paid less?
- whynotminot 2y agoAre you saying wages should be tied only to the difficulty of the work and not the value the labor produces?
- IncreasePosts 2y agoNo, but if the auger doesn't require any kind of specialized training to use (is mostly just point and click), I'd imagine it would be easier to find someone to do the work for you, versus finding someone to dig an equivalent amount of holes with a shovel.
- ketzo 2y agoThe value that the work produces is not necessarily a property of the worker.
- whynotminot 2y agoIt may also not be a property of the ceo who bought the auger. If it’s obvious to everyone that augers are the way to go, he didn’t bring any specific insight to the table. Why does he get all the reward?
- MichaelZuo 2y agoWho said anyone would ‘get all the reward’?
- whynotminot 2y ago
- rcpt 2y agoThis crypto website somehow goes viral every 6 months and I have no idea how they do it
- afh1 2y agoBasic screaming-at-your-face statistics, gets traction, specially coupled with the mental gymnasts trying to "disprove" facts, shouting "spurious correlation" when the implied causation is clear... Paper money is nothing new and this is nothing short of expected. The only surprise is people's surprise.
- Icy0 2y agoGrothendieck's disgust of the mathematics community also reached a breaking point in 1970!
- JumpCrisscross 2y ago"In October 1973, the Organization of Arab Petroleum Exporting Countries (OAPEC) announced that it was implementing a total oil embargo against countries that had supported Israel at any point during the 1973 Yom Kippur War, which began after Egypt and Syria launched a large-scale surprise attack in an ultimately unsuccessful attempt to recover the territories that they had lost to Israel during the 1967 Six-Day War. In an effort that was led by Faisal of Saudi Arabia,[1] the initial countries that OAPEC targeted were Canada, Japan, the Netherlands, the United Kingdom, and the United States." https://en.wikipedia.org/wiki/1973_oil_crisis https://en.wikipedia.org/wiki/1973_oil_crisis
- KikoHeit 2y agoWhich has nothing to do with this, since all the graphs show divergence in 1971, 2 years prior.
- JumpCrisscross 2y ago> all the graphs show divergence in 1971, 2 years prior Almost none of them do. First chart: dot is before the dip and divergence. Second chart is a mess, but even then, the non-blue lines are bundled until 1975; the blue line doesn't meaningfully depart until 1973. Third chart: divergence doesn't start until 1980. Did abandoning Bretton-Woods contribute to these changes? Probably. Is it the Mayan 2012 that this website tries to make it look like? No.
- wkat4242 2y agoIt's pretty common for a big event's effects only to show a bit later. I don't think it's only the gold standard though, no.
- Tade0 2y agoWhat's more, even without this embargo the era of cheap energy was largely over by the mid 60s, as oil's Energy Return on Investment fell to a fraction of what it used to be: https://www.mdpi.com/sustainability/sustainability-03-01866/article_deploy/html/images/sustainability-03-01866f1-1024.png https://www.mdpi.com/sustainability/sustainability-03-01866/...
- lucasoshiro 2y agoI don't understand a thing about most of the subjects depicted in those charts so I can't discuss their contents. But couldn't it be another case of confirmation bias and correlation not implying causation? In other words, if I pick a random year since, perhaps, 1950 and try to find charts where that year is an inflection point, would it be different to 1971?
- 867-5309 2y agowas thinking the same. seems like a nice bunch of spurious cherries picked by typewriter-wielding bardmonkeys
- affinepplan 2y agocrypto fixes this /s
- chrisbrandow 2y agoI long ago noticed the early 70's divergence of income inequality. I didn't realize that there was a Breton-Woods angle that some were pushing. I have no comment on that. I have always thought this was more closely related to the clawing back of higher tax rates on high income, which certainly helped set the conditions for higher executive compensation.
- cgh 2y agoAid to Israel is mentioned as contributing to this supposed 1971 disaster. Combine this with the linked “discussions” referencing cryptocurrency and Zerohedge (a disinformation site) and yeah, no thanks.
- benterix 2y agoFrom all charts, the most intriguing to me is the one comparing the median male and female income.
- deleted 2y ago[deleted]
- jnellis 2y agoI ran across this theory years ago about a piece of legislation in late 1970 allowed lobbyists into previously closed door committee meetings, thus allowing lobbyists to assert direct pressure on congressional members. The second video is from the same guy but is rather long and goes into this idea that transparency in congressional committees is a counter-intuitively bad idea because it allows lobbyists to proactively apply pressure before anything ever gets to a floor vote. https://www.youtube.com/watch?v=CgqhywW9Cto https://www.youtube.com/watch?v=CgqhywW9Cto https://www.youtube.com/watch?v=1gEz__sMVaY https://www.youtube.com/watch?v=1gEz__sMVaY
- glitchc 2y agoIn 1971, the US withdrew from the Bretton-Woods agreement. In 1973 we had the oil crisis: Net production in western countries had peaked and governments switched over to importing oil from OPEC. Those two events disenfranchised the working man in the US.
- temptemptemp111 2y ago[dead]
- jampekka 2y agoA lot of changed in the 70s. End of Bretton Woods, Nixon goes to China, oil shock, Southern strategy changes party politics, War on drugs starts, 1968 movements fail, FED turns to monetarism culminating in the Volker shock, Thatcher elected in UK (with Reagan shortly after). In short it was probably mainly the neoliberal turn.
- deleted 2y ago[deleted]
- dang 2y agoRelated: WTF Happened in 1971? (2019) - https://news.ycombinator.com/item?id=37482646 https://news.ycombinator.com/item?id=37482646 - Sept 2023 (105 comments) WTF Happened in 1971? - https://news.ycombinator.com/item?id=31471602 https://news.ycombinator.com/item?id=31471602 - May 2022 (102 comments) WTF Happened in 1971? (2019) - https://news.ycombinator.com/item?id=25188457 https://news.ycombinator.com/item?id=25188457 - Nov 2020 (454 comments) WTF Happened in 1971? - https://news.ycombinator.com/item?id=24135845 https://news.ycombinator.com/item?id=24135845 - Aug 2020 (5 comments) WTF Happened in 1971? - https://news.ycombinator.com/item?id=20811004 https://news.ycombinator.com/item?id=20811004 - Aug 2019 (44 comments) and: The Bad Economics of Wtfhappenedin1971 - https://news.ycombinator.com/item?id=39144867 https://news.ycombinator.com/item?id=39144867 - Jan 2024 (42 comments) The Bad Economics of WTFHappenedin1971 - https://news.ycombinator.com/item?id=37507749 https://news.ycombinator.com/item?id=37507749 - Sept 2023 (2 comments)
- DonHopkins 2y agoWeren't there a bunch of discussions about what happened in other years, or is it all 1971's fault?
- PittleyDunkin 2y agoI doubt that it's a single action that sustained four+ decades of impacts. More likely this is the concerted effort of capital to continually reign in threats.
- ratg13 2y agoWhy not? From Wikipedia: >In 1971 more and more dollars were being printed in Washington, then being pumped overseas, to pay for government expenditure on the military and social programs. In the first six months of 1971, assets for $22 billion fled the U.S. In response, on 15 August 1971, Nixon issued Executive Order 11615 pursuant to the Economic Stabilization Act of 1970, unilaterally imposing 90-day wage and price controls, a 10% import surcharge, and most importantly "closed the gold window", making the dollar inconvertible to gold directly, except on the open market. Unusually, this decision was made without consulting members of the international monetary system or even his own State Department and was soon dubbed the "Nixon Shock". https://en.m.wikipedia.org/wiki/Bretton_Woods_system https://en.m.wikipedia.org/wiki/Bretton_Woods_system
- JumpCrisscross 2y agoMeta question: is there a name the the psychological impact of putting an arrow on a random line where it really does make it look like that's an inflection point? Does this generalise beyond charts, e.g. to a narrative techique?
- gpderetta 2y ago> Does this generalise beyond charts, e.g. to a narrative techique? "Scare quotes"? Random Italic for emphasis?
- lokimedes 2y agoFraming bias or perhaps attentional bias.
- hn_throwaway_99 2y agoIf your implication is that the red arrow is just random, are we not looking at the same graphs? I'll grant that it looks to be cherry picking on maybe a couple of the graphs, but clearly appears that something significant and non-random happened in the 1970-1972 period.
- JumpCrisscross 2y ago> clearly appears that something significant and non-random happened in the 1970-1972 period How are you cutting it off that cleanly? How about this: pick a chart and I'll find the data. We can then look at the numbers and see if something significant happened in '71.
- hn_throwaway_99 2y agoSure, how about the first 2 graphs on the linked site?
- bryanlarsen 2y agoIn both cases the point of divergence appears to be ~1975.
- skywhopper 2y agoDunno, but lots of these charts are really poor.
- HumblyTossed 2y agoThe Heritage Foundation was started in 1973 and they've been pushing their stupid agenda ever since, so maybe that played into it.
- lxgr 2y agoThe end of the Bretton Woods system is basically the turmeric of macroeconomics.
- blamazon 2y agoStart of the unix epoch obviously. I also like the ISO standardization of shipping containers explanation.
- deleted 2y ago[deleted]
- jlhawn 2y agoMy favorite theory is that it's related to zoning, permitting, and the urban built environment. What happened in the early '70s is that many of the US's major cities saw broad downzoning which compounded the effect of urban flight to suburbs, urban renewal, and the construction of freeways in cities which started the decade prior. This ensured that the traditional productivity gains of cities could not be shared as equally any longer. It led to a lower labor share of income (higher share to rent/land) and longer commutes for suburbs which effectively lowered their share of wealth. Productivity gains since have mostly went to increasing economic rents for land owners and monopolistic capital owners. After California's Prop 13 in 1978, many other states followed with their own property tax caps in the late '70s and early '80s which led to even more of the share of economic gains going to property owners.
- DidYaWipe 2y agoWTF is up with that site, which is just a pile of charts with no analysis?
- neilv 2y agoThe Pentagon Papers?
- yobbo 2y ago"Energy and real GDP per capita, aggregate figures for G7 countries" seems the most telling to me. The world hit a limit in the rate of energy production, but governments wanted (depended on?) continued growth, so various mechanisms overspending were pursued. The result was inflation, which surfaces everywhere and affects everything.
- pjfin123 2y agoI calculated historical American wages in gold terms if anyone's curious: https://github.com/argosopentech/American-Real-Wages https://github.com/argosopentech/American-Real-Wages TLDR: wages in 2025 are roughly comparable to wages in the early 80s
- crispywisp 2y agoI think this group will appreciate this guy's analysis. "James D'Angelo (Winner 2014 MIT Climate CoLab, ex-NASA scientist) uncovers a crucial flaw in American democracy. Incredibly, the solution – which lays at the heart of all current social concerns (inequality, the recession, political division, government disapproval, Citizens United, civil rights and corruption) – costs under 5 dollars. James presents a breathtaking new look at congressional transparency and the troubles it has wrought by opening the doors to special interests and the wealthy. So, welcome to the world of Martin Gilens' 2014 paper and flatline graph. Also welcome to the world created by electronic voting machines and the Legislative Reorganization Act of 1970 (passed on October 26, 1970). Unheard of in any current political discussion, this act of Congress has produced endless avenues for lucrative lobbying of special interest groups." The Cardboard Box Reform - Nixon's Ghost Bill & A Crucial Flaw in Democracy https://www.youtube.com/watch?v=1gEz__sMVaY https://www.youtube.com/watch?v=1gEz__sMVaY
- crispywisp 2y agoWhether you agree with him or not, he makes a very strong case against transparency.
- amai 2y agoIn 50 years someone will make a website: WTF happened in 2020?
- bartimus 2y agoBasically, the world transitioned from “real value” to “perceived value”: * Money valuation (vs. gold-backed value) * Property valuation (vs. last transaction price) * Stock market (speculation and perception) * Individualism (perceived self-worth) * Sexual revolution (vs. stable atomic family) * Birth control (vs. unplanned family) Everything got fluffy.
- issac_0v0 2y agoI remember this was related to Reagan and Thatcher's policies. Essentially, it was more about concentrating funds and redistributing them. Those working on the distribution side, such as in finance and technology, benefited greatly.