Everything Changed in 1971


Everything Changed in 1971

Ever notice how often you run across a statement that says... since 1973 such-and-such has happened ... or... Between 1970 and 2000  ... or... In the past 30 years . . .? Always taking you back to the early 1970s? Ever wondered why the early 70s?

I have. So often that I started collecting the statements and assembled them here in no particular order.

So, what happened in 1971? That's when the France and England asked for their US dollars to be redeemed by the US treasury for the agreed upon $35 per ounce, and were refused. At that time the US banks had created some 6 times the amount of paper money as they could redeem. President Nixon announced that the dollar would "float." At that time gold notes were no longer used within US borders and silver certificates were exhanged for Federal Reserve Notes in 1964, so 1971 was the last time the world used a currency with any redeemable backing. They call it a "faith based" currency now, probably because of the number of bank customers that can be found praying in bank lobbies.

The sad part is that most of these citations are taken from articles in magazines whose writers and editors would deny any connection between the events they describe and Nixon's actions. I know, I have tried to make connections with publications like the Ecologist and the one thing they do not want to hear about is the money system. Only nutcakes talk about the money system.

So what has been the happening since the early 70s? Read for yourself.

"The average weekly earnings of the 80% of rank-and-file working Americans, adjusted for inflation, fell by 18% between 1973 and 1995, form $315 a week to $258 per week."

-- John Gray,
False Dawn, the Delusions of Global Capitalism,
1998,  page 114

     "He divided the 20th century world economy into two periods -- pre- and post-globalisation; between World War II and the 70s, and after the 70. The divide between the haves and the havenots has just grown in the second instance, he said. He said the concept of free trade as advocated by the US to developing economies creates only a section of the affluent."

Review of Noam Chomsky lecture on
"Militarism, Democracy and Right to Information"
at the Delhi School of Economics.
Times of India

"Average number of rural acres lost to 'urban sprawl' in the United States each year since 1970:   1,000,000"

  -- Harpers Index
  Harper's Magazine
  June 1999


From Jeff Gate's Shared Capitalism site.
This is the place for anyone looking for a snapshot of what "Spreading Democracy" and "American Values" are all about.

Economist Robert Frank reports that the top one percent captured 70 percent of all earnings growth since the mid-1970's

On an inflation-adjusted basis, the median hourly wage in 1998 was 7 percent lower than in 1973 - when Richard Nixon was in the White House.

The work year has expanded by 184 hours since 1970, an additional 4-1/2 weeks on the job for the same or less pay

Among the bottom fifth of households, average after-tax income fell nine percent from 1977 to 1999.

In New York, the highest-income five percent of families gained nearly $108,000 in average income per family from the late 1970s to the late 1990s, while the lowest-income 20 percent of New Yorkers lost $2,900

In 1973, the United States imprisoned 350,000 people nationwide. By 1998, the prison population was 1.8 million or roughly 674 people in prison per 100,000, while Europe-wide the imprisonment rate is 60 to 100 per 100,000.

The top one percent pocketed, on average, an annual tax cut of $40,000 since 1977, an amount exceeding the average annual income of the middle fifth of households. 

Between 1977 and 1999, the after-tax income of the top one percent grew faster (115 percent) than their before-tax income (96 percent). 

In 1998, 9,257 new and existing homes sold for $1 million or more, triple the number of million-dollar homes on the market in 1995. Annual mortgage interest payments on a newly purchased $1 million home total $79,247 (assuming 10 percent down and a 30-year adjustable rate mortgage at 8 percent). The home mortgage interest deduction for someone in the top 39.6-percent tax bracket saves on that house $31,382 a year in federal income taxes. When that saving is added to the $40,000 average annual tax cut allowed the top one percent since 1977, that $1 million home costs $7,865 per year, or $655 per month.

Jeff Gates
Ownership Statistics
Shared Capitalism

"[US government] Borrowing, which accounted for only 5.3% of federal spending in the 1960s, increased to 29.9% in the 1990s."  ...  "Between 1977 and 1992, the average productivity of American workers increased by more than 30%, while the average real wage fell by 13%." [emphasis in original]

"To Have and To Have Not"
by Michael Lund,
Harper's Magazine,
June 1995 Page 35

"Foreign direct investment (FDI) has changed the face of the international economy. Since the early 1970s, it has grown faster than global trade and is the single most important source of capital for developing countries, not net saving. FDI is denominated in dollars, a fiat currency that the US can produce at will since 1971."

--from Henry Liu
"Trade In the New Cold War"
Gang of 8 e-list
13 May 2001

"Over the last thirty years, we've lost over 300,000 farm families in this country. Over the last two years, pork prices were driven by corporate mass production to their lowest levels ever. A 250 pound hog, which sold in 1996 for $51, sold in 1998 for $31. With the cost of production for family farmers $38 for that same hog, most of the family farm hog producers went bankrupt or became employees -- wage slaves, really -- of the agribusiness corporations."

(Program on Corporations Law and Democracy)
By What Authority, spring 2001

"In 30 short years, with World Bank cash and Western 'know-how,' Yemen has been transformed from...being a country that produced more than 1 million tonnes of grain annually in the 1970s to one producing barely 150,000 tonnes today, and a country where a crisis in the supply of drinking water is so acute that people in the second city, Tiaz, wait up to 40 days for their taps to run."

The Ecologist, Hung Out to Dry,
by Richard Milton, vol. 31 No. 10,
Jan 2002, p.63

"Most important of all, since 1975, I have been witness to tensions between the Buddhist majority and the Muslim minority in Ladakh, or 'Little Tibet', in the western Himalayas. For more than 600 years these two groups lived side by side with no recorded instance of conflict. They helped each other at harvest time, attended one another's religious festivals, even intermarried. But within a decade of the imposition of western-style "development" Buddhists and Muslims were engaged in pitched battles, including the bombing of each other's homes."

The Ecologist, Globalization and Terror,
by Helena Norberg-Hodge,
vol. 31 No. 10, Jan 2002, p.36

''Before 1973 or thereabouts, there was enough growth that a reasonable amount could be shared with the middle classes - the whole pie was growing. Since that time the growth of the pie has slowed down, but the elite share has not slowed down. Corporate profits are at an all time high. That piece of the pie keeps growing by stealing from other pieces."

10 Jan 2002
Richard K. Moore
 Do you believe in the tooth fairy?

"According to Munich Re, the reinsurance group, the number of great climate-related and flood disasters quadrupled during the 1990s compared with the 1960s; resulting economic losses increased eight-fold  during the same period. If that trend continued we would arrive at the absurd situation just  after the middle of this century of the costs from global warming overtaking the value of  gross world product."

Friends of the Earth,
-Deuda Ecologica

"By the late 1970s, there was a huge increase in the dollars floating around the world economy - the rate of growth in dollars between 1973 and 1980 was 20 times the growth in volume of trade."

Adventures of the Dollar,
by Howard M. Wachtel, professor of economics
at the American University, Washington, DC

"Financial futures contracts are exchange-traded contracts dating from 1972 when foreign currency futures contracts were first introduced. Similar to forward contracts, futures contracts involve binding obligation under which a participant either sells or buys a specific asset at a specified exercised price on contract maturity date."

The Problems with the International System of Money and Finance.
(and why the Tobin Tax is ineffective)

"The number of children living in poverty in England in the year 2000 has just about trebled since 1968 from 1.4 million to 4.4 million, as not surprisingly, has the number of lone parents during the same period."

The Ecologist, Poverty - The Child of Progress,
by Teddy Goldsmith,
vol. 31 No. 6 July/August 2001, p.45

"A more recent study, published in the Archives of General Psychiatry in 2000 and conducted by another team of researchers, showed more than a doubling of depression in women from 1970 to 1992. Psychiatric drug use has skyrocketed as a result. American schoolchildren today are taking four times as many psychiatric meds as all of the rest of the world combined."


"Happiness is actually in decline: In 1970, 36 percent of Americans said they were 'very happy.' ... but a mere 29 percent say they are 'very happy' [today in 2001]"

--William Falk,
editor of "The Week,"
June 1, 2001, page 3

"He noted that the [UK] money supply in 1971 was just under £31 billion whereas "at the end of the third quarter of 1996 it was about £665 billion" and that during the intervening 25 years government had "minted only about £20 billion" of the increase, whereas "It is the banks, the building societies and our commercial lenders who have created the balance of £614 billion."

Alan Armstrong
Political Economic Cycles, Electoral Myopia and Triumph of the Money Power

An analysis of long-term trends shows the distance between the richest and poorest countries:

 3 to 1     in 1820     yrs   pts      pts/yr increase
 11 to 1   in 1913     93     8            .086
 35 to 1   in 1950     37     24          .64
 44 to 1   in 1973     23     9            .39
 72 to 1   in 1992     19     28       1.47


"Between 1970 and 1994 the median A.F.D.C. [aid to families with dependent children] payment to a family of three was cut 47%"

--Mat Weurker,
Funny Times, Aug 1995, p 8

"In the United States, the median real wage is about the same today as it was 27 years ago. This means that the majority of the labor force has failed to share in the gains from economic growth over the last 27 years.
    That is drastically different from the previous 27 years, during which the typical wage increased by about 80% in real terms.
    Trade has doubled as a percentage of our economy since the early 1970s, and there is no doubt that globalization has played a significant role in the worsening distribution of income here."

--The Emperor Has No Growth: Declining Economic Growth Rates in the Era of Globalization By Mark Weisbrot, Robert Naiman, and Joyce Kim,

"Cumulatively, since 1980, Americans have bought $1.5 trillion more than they sold in their merchandise trade with foreign nations.  The trade deficits started modestly in 1975, exploded during the 1980s, and, despite ebbs and surges, set a dollar-volume record of $180 billion in 1995."

Greider, William,
One World Ready or Not: The Manic
Logic of Global Capitalism , p.48.

 "Much of what we now call growth or GDP is really just one of three things in disguise: fixing blunders from the past, borrowing resources from the future, or shifting functions from the traditional realm of household and community to the realm of the monetized economy.  After rising somewhat between 1950 and the early 1970s, they said, the Genuine Progress Indicator (GPI) declined until in 1994 the GPI was 26% lower than it had been in 1973, and on a per capita basis it had fallen 42% since 1970!"

--Richard Stimson's "Playing with the Numbers"
citing the group "Redefining Progress,"
Clifford Cobb, Ted Halstead, and Jonathan Rowe,

"Jubilee 2000 organisations ... argued that 30 years since the globalisation process began, the quest for financial gain, has become more important than respect for human or environmental rights."

April 25, 2001
Bamako, Mali

"US wages peaked in real terms in 1973 and have been declining ever since, compounded by the fact that Americans work longer hours than they did two decades ago."

The Future of Money: a new way to create wealth, work and a wiser world,
by Bernard Lietaer,
Century/Random House, 2001

"The richest 1 percent of households now have over 40 percent of all private wealth; in the mid-'70s, 1 percent had 20 percent."

Chuck Collins,  March 2001,
Co-director of United for a Fair Economy,
co-author of "Economic Apartheid  in America"

"Today 358 people are worth the combined income of 45% of the planet's population --2.5 billion people."

Reinventing Money, Restoring the Earth, Reweaving the Web of Life
by Carol Brouillet

"CEOs make 476 times the average factory worker; in 1980 it was 42 times. In 1976, the richest 10 percent owned 49 percent of all wealth, now it's 73 percent."

Chuck Collins,
see above

"As Lucy Roberts recalls in her very well-researched work on the retirement schemes in the States, in 1975, 39% of wage-earners in the private sector benefitted from complementary retirement schemes; in 1995, that figure had fallen to 23%, and has since fallen even lower."

François Chesnais, member of the Scientific
Advisory Council, Attac Newsletter #46

"There have been currency crises in 87 countries since 1975..."

The Ecologist magazine,
Dec 2000/Jan 2001,
Vol 30 No. 9, p. 28:

" We now have 2  million prisoners in the U.S. There are 164,000 in California state  prisons; in 1970, there were 20,000."

A board member of California Prison Focus

"From 1934 to the early '70s, there were very few bank failures. And there were essentially no runs on banks because of liquidity problems . . . what destroyed the usefulness of deposit insurance was the inflation of the 1970s . . ."

Milton Friedman
Fed Reserve Bank of Minneapolis, The Region, June 1992

"After a rash of bank failures in the early 1930s, Federal deposit insurance was enacted by Congress, but over strong opposition. The opponents argued that it would encourage bad banking and eventually become a burden to the taxpayer. But for the first time in the history of American banking, there was a lengthy period without bank runs or banking panics, and very few banks failed. That all began to change in the 1970s. It reached a crisis in the 1980s when bank failures, though less numerous, far exceeded the total assets (in constant dollars) of failed banks in the 1930s."

 "Deposit Insurance" chapter
Financial Institutions and Markets by Meir Kohn, 1994

"... the gap between rich and poor is growing. In 1997, the richest fifth of the world's population enjoyed 74 times the income of the poorest fifth, up from 60 times in 1990 and 30 times in 1960."

The Treaty of Noordwijk 27 Nov 2000
Richard Douthwaite <richard@DOUTHWAITE.NET>

"And in the post-war world, economic growth has tended to contract as free trade has expanded. In the past 25 years of liberalized global commerce, compared with the period prior to 1973 when it was more regulated, productivity and growth rates of industrialized economies have been cut in half. In the developing world, income growth has fared even worse."

Free Trade Truck Grinds Theoretical Gears,
by Peter Costantini, Seattle - November 23, 1999

Progress: It's our most important product.


© copyright 2002 J. Walter Plinge France
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