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What the Hell Happened Circa 1980?

What if...?

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I would like to know what happened around 1980 that so radically changed the economic trajectories of the various quintiles.

SOMETHING (or things) certainly did. Our entire economy changed in a fundamental way. Not just wages and incomes.

I know its not a single factor, but the shift is abrupt. I've seen it in a variety of graphs and charts, illustrating any number of different phenomena, all with a distinct "change" point right around 1980.

I personally believe that a key element was the world "filling up". Our "expansionist" capitalist model became unable to expand at its customary rate, resulting in a change in its nature as it sought new ways to continue to increase profits.

What do YOU think happened.

(I've been working my ass off helping a buddy get caught up in his remodeling business, so I'm only posting a bit in the evenings, so my thread tending will be limited. But I've been wanting to do a thread on this subject for a while and felt inspired tonight)
 

LuckyDan

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I became eligible to vote.

And baby did I vote.

Fear me.
 

LuckyDan

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For serious.

1980 was the year we trashed Jimmy Carter.

I'm hoping 2012 will have a similar effect on our economic trajectory, and that our capitalist model will find new ways to increase profits
 

whysoserious

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For serious.

1980 was the year we trashed Jimmy Carter.

I'm hoping 2012 will have a similar effect on our economic trajectory, and that our capitalist model will find new ways to increase profits
The difference being Barack Obama inherited the economy when it was in shambles and it has only improved since he has been in office.
 

LuckyDan

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In 1980 this was our President. He went on TV and told us our country sucked.


We voted him out and elected a man who told us to go for it.
 
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FilmFestGuy

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And we voted for a man who raised the Capital Gains tax rate so that it matched the rate for Income earned through work.

But I note that Republicans of today fail to mention that part.
 

barbarian_style

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Well, in the late 70's we just went through a downed economy, Reagan then freed up some moneys by borrowing into the SS funds. Then he sunk major money into the space program, hence technologies that are widely used and abused by consumers. This created jobs in a positive way and set the table for Clinton to capitalize on the advancing technologies. Adding in Reagan's union busting policies wages became somewhat stagnant and this created more capital on the corporate levels to invest in jobs which were everywhere within the U.S., we have been auctioning them off to china and other countries that don't set standards of living ever since the late Clinton era. Bush 2 came in as jobs were being auctioned off at high volumes to other countries, baby boomers are cashing out, cut revenues through the tax cuts and high unemployment rates that instead of paying taxes into a system are now leaching off the social unemployment welfare programs. Then to top it all off we are bailing out some jack hole that pilfered the retirement funds of the people trying to cash out, good thing SS wasn't privatized there. After the build up to the crash of the economy we have Obama. His economic plan? Not sure he never says other than he will take his family to Disneyland Hawaii 3-4 times before he's voted off the island, I mean out of office.
 

Frolicking Dinosaurs

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I was an adult raising kids in 1980s. Developing countries faced economic and social difficulties as they suffered from overlapping debt crises in the 1980s, requiring many of these countries to apply for financial assistance from the International Monetary Fund (IMF) and the World Bank. There was a major famine in early 1980s as well.

Carter had paved the way to China during the late 1970s. A lot of wealth and production formerly in the US migrated to newly industrializing economies and China under Reagan's free-trade and laissez-faire policies toward corporations which did away with tariffs and regulations that had previously kept this from being an attractive option.

What happened to the US debt was Ronald Reagan and his trickle down economic policy. He cut taxes on the wealthy dramatically and also made moderate cuts in taxes on the middle class & poor. He then borrowed extensively to keep services at pre-tax-cut levels. This caused our debt to skyrocket while our economy appeared to be booming.
 

LuckyDan

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And we voted for a man who raised the Capital Gains tax rate so that it matched the rate for Income earned through work.

But I note that Republicans of today fail to mention that part.
Republicans of today don't know what a capital gain is. Not many people do.
 

What if...?

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Well, in the late 70's we just went through a downed economy, Reagan then freed up some moneys by borrowing into the SS funds. Then he sunk major money into the space program, hence technologies that are widely used and abused by consumers. This created jobs in a positive way and set the table for Clinton to capitalize on the advancing technologies. Adding in Reagan's union busting policies wages became somewhat stagnant and this created more capital on the corporate levels to invest in jobs which were everywhere within the U.S., we have been auctioning them off to china and other countries that don't set standards of living ever since the late Clinton era. Bush 2 came in as jobs were being auctioned off at high volumes to other countries, baby boomers are cashing out, cut revenues through the tax cuts and high unemployment rates that instead of paying taxes into a system are now leaching off the social unemployment welfare programs. Then to top it all off we are bailing out some jack hole that pilfered the retirement funds of the people trying to cash out, good thing SS wasn't privatized there. After the build up to the crash of the economy we have Obama. His economic plan? Not sure he never says other than he will take his family to Disneyland Hawaii 3-4 times before he's voted off the island, I mean out of office.
Ok, but for the purposes of this thread I want to try to focus on events around 1980.

There's a "blip" and course change in a LOT of economic graphs around this time.

And changes in our politics and in the fabric of our society as a whole.
 

What if...?

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What made me finally start this thread was I saw somewhere that a bunch of changes in election laws occured in 1979.

It was also the beginning of the era of the "think tank".
 

LuckyDan

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Ok, but for the purposes of this thread I want to try to focus on events around 1980.

There's a "blip" and course change in a LOT of economic graphs around this time.

And changes in our politics and in the fabric of our society as a whole.
Well, yeah. We dumped Carter. Mr. Reagan made us feel better. Carter, like BO, had everyone hunkering in the weeds, waiting him out. Reagan told us it was safe and things got going again.

Get rid of BO and watch the same thing happen in 2013.
 

finebead

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I would like to know what happened around 1980 that so radically changed the economic trajectories of the various quintiles.

SOMETHING (or things) certainly did. Our entire economy changed in a fundamental way. Not just wages and incomes.

I know its not a single factor, but the shift is abrupt. I've seen it in a variety of graphs and charts, illustrating any number of different phenomena, all with a distinct "change" point right around 1980.

I personally believe that a key element was the world "filling up". Our "expansionist" capitalist model became unable to expand at its customary rate, resulting in a change in its nature as it sought new ways to continue to increase profits.

What do YOU think happened.
This is the key question. I agree something happened, actually, many things happened.

Summary

Nixon’s greatest innovation was his approach to the People’s Republic of China. Sensing the time was right to make an overture to China, Nixon sent a nervous Henry Kissinger to confer secretly with Chinese premier Zhou En Lai in July 1971. Nixon’s own 1972 summit meeting in China, at which he signed the "Shanghai Communique," was a diplomatic triumph that left the president’s critics, accustomed to his fervent anti-communism, astonished and off-balance. China had finally entered the world stage. Within a few weeks, Nixon was in Moscow to negotiate the first step in a Strategic Arms Limitation Treaty, (SALT). Born in that session was the era of détente, a search for accommodation between the the superpowers, and an effort to reduce the danger of nuclear war. Other leaders would follow, but Nixon openned the door.
Nixon Travels — China

This was a start on the road to an excess of world wide LABOR. About 1.2 billion people who did not participate meaningfully in the world economy just joined. It took a couple of decades before it began to be felt, but this was the start in 1972.

- In 1981, IBM introduced the Personal Computer to corporate america. Before that, there were some Atari systems and Radio Shack TRS 80 (Trash 80's!) personal computers, but IBM legitimized it, and corp. america could depend on an adequate supply chain and standards for hardware and software. This ushered in the widespread use of spreadsheets, word processing, and database applications to the masses. There were also new custom applications like AutoCad that dramatically reduced the need for draftsmen, as one person could do the job of 10 working manually. The ensuing productivity kept lowering product cost for decades. This was hostile to labor.

- Robots, began entering the workforce in the 70's, use has become commonplace, replacing the need for humans. Robots don't call in sick on Monday.
Factory robots
Car production
Over the last three decades automobile factories have become dominated by robots. A typical factory contains hundreds of industrial robots working on fully automated production lines, with one robot for every ten human workers. On an automated production line, a vehicle chassis on a conveyor is welded, glued, painted and finally assembled at a sequence of robot stations.

Packaging
Industrial robots are also used extensively for palletizing and packaging of manufactured goods, for example for rapidly taking drink cartons from the end of a conveyor belt and placing them into boxes, or for loading and unloading machining centers.

Electronics
Mass-produced printed circuit boards (PCBs) are almost exclusively manufactured by pick-and-place robots, typically with SCARA manipulators, which remove tiny electronic components from strips or trays, and place them on to PCBs with great accuracy.[76] Such robots can place hundreds of thousands of components per hour, far out-performing a human in speed, accuracy, and reliability.[77]

Automated guided vehicles (AGVs)
Mobile robots, following markers or wires in the floor, or using vision[78] or lasers, are used to transport goods around large facilities, such as warehouses, container ports, or hospitals.[79]

Early AGV-Style Robots
Limited to tasks that could be accurately defined and had to be performed the same way every time. Very little feedback or intelligence was required, and the robots needed only the most basic exteroceptors (sensors). The limitations of these AGVs are that their paths are not easily altered and they cannot alter their paths if obstacles block them. If one AGV breaks down, it may stop the entire operation.

Interim AGV-Technologies
Developed to deploy triangulation from beacons or bar code grids for scanning on the floor or ceiling. In most factories, triangulation systems tend to require moderate to high maintenance, such as daily cleaning of all beacons or bar codes. Also, if a tall pallet or large vehicle blocks beacons or a bar code is marred, AGVs may become lost. Often such AGVs are designed to be used in human-free environments.

Intelligent AGVs (i-AGVs)
Such as SmartLoader[80], SpeciMinder,[81] ADAM,[82] Tug[83] and MT 400 with Motivity[84] are designed for people-friendly workspaces. They navigate by recognizing natural features. 3D scanners or other means of sensing the environment in two or three dimensions help to eliminate cumulative errors in dead-reckoning calculations of the AGV's current position. Some AGVs can create maps of their environment using scanning lasers with simultaneous localization and mapping (SLAM) and use those maps to navigate in real time with other path planning and obstacle avoidance algorithms. They are able to operate in complex environments and perform non-repetitive and non-sequential tasks such as transporting photomasks in a semiconductor lab, specimens in hospitals and goods in warehouses. For dynamic areas, such as warehouses full of pallets, AGVs require additional strategies using three-dimensional sensors such as time-of-flight or stereovision cameras.
Robot - Wikipedia, the free encyclopedia

- Widespread use of email. This has made many information based / information sharing jobs "geographically independent".

- Widespread use of the internet. This has made many information based / information sharing jobs "geographically independent".

- Advances in the quality of telephone services, especially internationally and vastly reduced cost of telephony. This has made many information based / information sharing jobs "geographically independent".

So, advances in computer and robotic technology are reducing the need for many traditional jobs in america, and widespread use of email/internet/telephony allow us to tap the huge job markets in asia, primarily China and India, but also Japan, S. Korea.

These are all 1970's to 1990's phenomenon, and they all add up to offshore jobs or eliminate traditional jobs. What we are left with is too many people in the US, chasing a smaller pot of jobs. For decades we have been told not to worry about the loss of those "low tech" jobs in the US, as they would be replaced with better "high tech" and "service sector" jobs that would not be so boring. One bad thing about service sector jobs, they are all "discretionary", instead of hiring someone to do them, we could just do it ourself when times get hard, and that is what we typically do. That is a big reason why unemployment remains high 2 years into the recovery. The nature of the jobs people did the last 20 years is not at all the same as the nature of jobs done in the 20 years before that, say 1960-1980.
 

poweRob

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In 1980 this was our President. He went on TV and told us our country sucked.


We voted him out and elected a man who told us to go for it.
meh...

He didn't say we sucked. He said we had responsibilities and people hated hearing that. We threw out a politician that would actually tell the truth to us and opted for a hollywood smile that told us all about a shining city on a hill. Then threw us into deficits we'd never seen before.
 

poweRob

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Republicans of today don't know what a capital gain is. Not many people do.
They should. It's who funds their candidates... and it's doesn't even belong to the 1% OWS is bitching about...

===================
Who earns capital gains income? The top 0.1 percent, mostly

“Income and wealth disparities become even more absurd if we look at the top 0.1% of the nation’s earners — rather than the more common 1%. The top 0.1% — about 315,000 individuals out of 315 million — are making about half of all capital gains on the sale of shares or property after 1 year; and these capital gains make up 60% of the income made by the Forbes 400.”
===================
 

LuckyDan

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meh...

He didn't say we sucked. He said we had responsibilities and people hated hearing that. We threw out a politician that would actually tell the truth to us and opted for a hollywood smile that told us all about a shining city on a hill. Then threw us into deficits we'd never seen before.
And didn't it all just totally SUCK!? God how I hope we never go back.
 

LuckyDan

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They should. It's who funds their candidates... and it's doesn't even belong to the 1% OWS is bitching about...

===================
Who earns capital gains income? The top 0.1 percent, mostly

“Income and wealth disparities become even more absurd if we look at the top 0.1% of the nation’s earners — rather than the more common 1%. The top 0.1% — about 315,000 individuals out of 315 million — are making about half of all capital gains on the sale of shares or property after 1 year; and these capital gains make up 60% of the income made by the Forbes 400.”
===================
I don't know. Maybe.

But Michael Moore, Warren Buffett and Bill gates all vote Dem.

I'm sucking wind over here, and I don't see a Dem who gives a ****. What am I missing?
 

barbarian_style

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Ok, but for the purposes of this thread I want to try to focus on events around 1980.

There's a "blip" and course change in a LOT of economic graphs around this time.

And changes in our politics and in the fabric of our society as a whole.
Again I will say it was from coming out of a downed economy of the late 70's Reagan invested in the star wars program, which in return created jobs. Reagan dealt with the airlines at the time to keep overhead down for the corporations. Yet you need to look at the economy as a whole even though the star wars program was a failure in the idea that Reagan had; yet private investors started stepping up and investing in the new technologies being developed within the program. This was like the race to the Moon, we were going to win the Cold War. Reagan did too. This working society was making cash and felt comfortable in spending cash. This is real cash not some credit fiasco. It was a great decade to prosper, the 90's clouded what Reagan did in his vision of a great job stimulus package with the star wars program that spurred interest for public investments.

80's, what a great decade for America and a vision for America to prosper...
 

1Perry

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And we voted for a man who raised the Capital Gains tax rate so that it matched the rate for Income earned through work.

But I note that Republicans of today fail to mention that part.
I've argued over and over that we need to do that.
 

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Again I will say it was from coming out of a downed economy of the late 70's Reagan invested in the star wars program, which in return created jobs. Reagan dealt with the airlines at the time to keep overhead down for the corporations. Yet you need to look at the economy as a whole even though the star wars program was a failure in the idea that Reagan had; yet private investors started stepping up and investing in the new technologies being developed within the program. This was like the race to the Moon, we were going to win the Cold War. Reagan did too. This working society was making cash and felt comfortable in spending cash. This is real cash not some credit fiasco. It was a great decade to prosper, the 90's clouded what Reagan did in his vision of a great job stimulus package with the star wars program that spurred interest for public investments.

80's, what a great decade for America and a vision for America to prosper...
A few notes: The Star Wars program for the most part was a ruse, and trick, a con. Yes we had some ideas about satellites in space shooting down Soviet missiles, and our game face was great, but in reality the SWP was a total flop, and didn't cost American tax payers very much. What it did do was bankrupt the USSR, and brought down the wall. With the cold war ending, and as you've pointed out in several other examples, our society began to lift itself abruptly from total despair to once again having a bright future. The 70's was great for music but hard on people financially, cash was a luxury, no credit to speak of. The 80's saw cash as king and the relaxing of banking regulations, and several other financial sector regulations. Towards the end of the 80's, and into the 90's credit was now king. We had the internet, and the proliferation of personal computers and innovation all due to the credit bubble. Not only were banks’ lending, they were lending to each other in massive derivatives swaps. (Yes derivatives swapping was not a phenomenon on the late 2000's) Into the 2000's banks were encouraged to lend to people with no credit, or little credit, and yes, even toxic credit. So we went from the credit was king society, to credit was now being handed out by the court jester. :)

What happened? Well the credit bubble went on a diet. It's still there in some form, but not as bloated and stretched as it was leading up to 2008. Credit is still king but only by default, and ONLY because our system is so geared toward a-we want it now mentality. Ok, so these are the cliff notes.. A lot more went into it, but this is the short version..


Tim-
 
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