73-80 Economy Flashcards
What was caus8ng the economic issues
West Germany and Japan car manufacturers
Oil producing country’s had placed an embargo on america
America left the gold standard which meant high inflation, nixon bought in artifical inflation control
It was a time of deindustrialisation which hit rust belt states particularly hard
Problem:,inflation
It was in near or double figures during much ot the 70s, so everything was mor3 expensive, mortgages loans and food.
In 1978 63% of Americans said it was their greatest concern.
However it was not evenly spread across the country with those in manufacturing j9bs be8ng hit more.
By 1975 unemployment was 8.9% due to foreign competition
Social imoact- many mothers had to 9ut to work to maintain family incom3. This lead to divorce rate of 50%
Problem- poverty and homelessness
Black women especially mothers were disproportionatly hit.
Numbers belowthepk erty line grew
Black family incomes were disproportionately affected as the were often represented I unskilled occupations.
Homelessness also increased due to reduced federal support for mental institutions and lowered welfare benefits.
Low cost hotels also were demolished as a part of urban renewal
Problem- oil crisis
Around 30% of Americas oil was imported this vulnerability was exposed when there was a embargo placed on usa
When the embargo end3d oil prices rose by 387%, this problem was made worse with the harsh east coast winter in 1976
The period saw rising strikes by truckers and mine workers
The government suggested turning down the thermostat or sharing car journeys
Problem- foreign competition
In 1970 america still produced 25% of the world manufactured good, however there were rivals emerging who were technologilly superior.
West Germany and Japan were producing fast and efficient cars compared to us gas guzzlers.
Th3 centre of th3 car industry detritus saw unemployment rise to 24% by 1980
The trade deficit rose by 1978 to $40 billion
Significance of inflation
Mothers had to go out and work, divorce rat3s rose to 50%
1975 unemployment was 8.9%
Poverty and homelessness significance
Mainly affected black female head of households
Homelessness increased
Government reduced mental facility support welfare benefits and cheap hotels taking away any support
Oil crisis significance
Shkwed American reliance on other countries
Foreign competition significance
Detroit saw unemployment rise to 24%
why did inflation occur
rising federal debt due to vietnam and the great society.
foriegn competition
in 1971 nixon ended the convertability of dollars which had created the stability of the dollar.
also the rising cost of oil
why did unemployment occur
declining industries.
jobs only available in the service sector which was low paid.
mechanisation in textiles and coal mining industries. hit those in the rustbelt worst of all
why did the oil crisis occur
1973 Yom Kippur war led to uncertainty about the availibilty of oil.
OPEC raised international price of oil.
America was 6% of the global population but consumed 1/3 of all oil
why did foriegn competition occur
American cars were gas guzzlers. West german and japanese cars had better fuel consumption.
EEC had 9 countries and became a powerful trading block.
growing threat in electronics from Sony and Toshiba
Why did poverty and homlessness occur
lack of welfare services in America
Unemployment and the closure od mental facilitys.
renewal schemes demolished cheap hotels
what issues were there
-inflation
-unemployment
-oil crisis
-foriegn competion
-poverty and homelessness
effect of inflation
rising prices. the mcdonalds burger went from 15c in 1967 to 50c by 1980
between 68 and 78 cost of living doubled
average econmic growth was only 3.2%
inflation reached 10% in 1978
effect of unemployment
rising poverty by Jan 1975 it was 7%
effect of the oil crisis
Sense america was not in control of its own economy. and exposed its vunrability
there were queues at petrol station and factories were forced to close.
in 1970 importing cost $4bill in 1980 it cost $80bill
effect of foriegn competition
big three car manufacturers laid off 224,000 workers in 1974.
trade deficit of $40 bil by 1978
effect of poverty and homelessness
rose in areas that had the least amount of welfare provision e.g Mississippi
those in poverty rose to 12.5% by 1976
rise in level of crack cocaine use
ford government response to inflation
Ford introduced WIN (whip inflation now) as a voluntary restraint to curb inflation. But he abandos WIN to focus on unemployment
ford government response to unemployment
tax cuts $16 billion to stimulate growth and employment
ford governemnt response to oil crisis
asked drivers to voluntarily cut mileage by 5%
Carter AND Ford response to poverty and homelessness
a state, not a federal issue. some states actually reduced taxation which damaged welfare services.
Urban renewal programmes started under the New Frontier saw the closure of skid row low cost hotels
Carter government response to inflation
rose federal minimum wage from $2.10 to $3.35 (not enough to keep pace)
Did little to tackle inflation,
encourgaed greater market compettion to reduce prices for consumers
carter government response to unemployment
congress agreed federal governemnet of last resort but not supported by Carter.
$4billion stimulus package by Carter on public works
inflation by 1980
13.8%
Carter government response to oil crisis
NEP 1977 deregulated natural gas prices
created a department for energy to promote sustainable energy
promoted limeters on cars and home appliances
between 1979 and 83 consumption fell 10%
Carter government response to foriegn competition
carter went to Japan to ask for voluntary restraint on car exports to the US
1979 bailout of Chrysler with $1.5billion loan
What did CArter do to end dependcy on the middle east
better insulation on buildings
oil conservation
higher taxes on auto mobiles.
