Economic Issues (The 70's)
Wheels and Steel
The Stagflation Dilemma
Key Terms
- Inflation
- Stagnant Economy (decrease in production...why)
- Stagflation
- Embargo
- Recession
- People in America had enjoyed an increasing standard of living…since 1945
- Unusual time when production is slowing and prices are rising
- FED wants these two on the same track
- What is the FED?
- Japanese and West German Manufacturing was making higher quality goods…for the same price
- Inflation caused the dollar to drop in value, went from 3 to 11% in only a year
- Huge effect on US auto manufacturing
- Public chose to NOT buy the Detroit gas-guzzlers
- The Steel industry could no longer compete
- US Steel in world market dropped from 37%-14% in only a few years
- No steel=no US car manufacturing
- Turned to Congress to impose quotas…refused
Energy Crisis is Born
Ford Pardons Nixon
- The rising price of oil drove inflation for the entire country…why?
- The US economic machine was consuming gas at astronomical rates
- OPEC: Org. of Petroleum Exporting Countries: set common prices, quotas and price ceilings
- Yom Kippur War (Israel v. Egypt and Syria) in 73 caused Saudi Arabia and others imposed an embargo of oil to all of Israel’s allies
- War ended in only a year but the effects lasted until the end of the decade
- America is injured…Vietnam, Watergate
- Less than a month from resignation…Ford Pardons Nixon
- Attempt to heal the country
- America didn’t approve
- Ford was in through appointment rather than election
- Later would receive the 2001 courage award from the JFK Lib. Foundation.