In Judith Stein’s Preface and Chapter 1 of Pivotal decade, The United States diminishing decade and fighting to come back from the economical damage that had happened. Upon reading I learned the 1970s was the only decade other than the 1930s where Americans ended up poorer than what we had imagined. Stein provided so much data and facts that were not what we imagined the 70″s era to be where we thought about disco, the Watergate , hippie era just to name a few,she also dicussed that the economy is the foreground. But every economy is shaped by politics. By 1945, Americans had become much richer than people of other nations with the gowth in new technology and produtivity. 54% of families in the United States owned their own cars and began traveling more frequently as Boeing released their firt 707. 44% of the population were homeowners and had migrated to the suburbs after being able to finally afford homes . By 1970, 63% of families were homeowners, moving to the suburbs these migrations were made possible by higher wages, thirty-year GI bill home loans, the application of mass-production techniques to home-building, federal highway construction with over 60% of the population was driving, and corporate decisions to locate operations away from cities to attract a new crowd.
Between 1947 and 1973 disposable income increased 15 percent in real terms. For the first time in history, large numbers of workers had
discretionary income, money that they could decide how to spend. The Keynesian idea states that promoted employment fostered polices that produced the Great Compression. “Keynesianism was in its heyday in the United States in the 1960s when Presidents John Kennedy and Lyndon Johnson cut taxes by $11.6 billion to increase aggregate demand and investment. (Spending on military items for the war in Vietnam helped, too.) The resulting investment rates of 16 and 17 percent, as a percentage of GDP, equaled those of the boom of the mid-1950s”.
With all these new policies and the goverment finally taking action to better the economy, places such as Japan and Europe were also developing at a rapid pace. Like the United States, the Europeans and Japanese agreed that the lesson of the 1930s was that government should shape and stabilize the market while allowing private investors to create jobs and implications on Tariffs also began with the introduction to GATT. The United States looked the other way as Europe and Japan protected markets began discriminating against American producers. The large American market quickly became economic competitors.President Kennedy’s undersecretary of state for economic affairs, welcomed European imports in the United States.They had been a lobbying for the European Economic Community (EEC) in Wash-
ington.American growth rates in the 1950s were lower than those in Europe and Japan. The U.S. economy grew at a rate of 2.3 percent a year between 1955 and 1961.
“The EEC, created in 1957, was really a customs union that violated the GATT. The community ‘‘averaged up’’ tarrifs, increased farm imposts, and kept American coal out with tight quotas”. U.S. exports to Europe fell while military expenditures in Europe continued. Thus, the U.S. balance of payments was in deficit.
Judith Stein speaks on what the Age of Compression was and how it became the Age of Inequality. The Age of Compression officially ended in 1973 after wages stopped growing because of the drop in productivity and equality with more private corporations, with the rate of productivty declining and wage growth falling suit.
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